Looking back on energy products and services stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Quanta (NYSE: PWR) and its peers.
Areas like the energy transition and emission reduction are thematic and front of mind today. This can be a double-edged sword for the energy products and services industry. Those who innovate and build new expertise can jolt demand while those who cling to legacy technologies or fall behind in the trending areas could see their market shares diminish. Bigger picture, energy products and services companies are still at the whim of construction and infrastructure project volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.
The 4 energy products and services stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 5.6%.
Luckily, energy products and services stocks have performed well with share prices up 38.6% on average since the latest earnings results.
Quanta (NYSE: PWR)
A construction engineering services company, Quanta (NYSE: PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.
Quanta reported revenues of $6.77 billion, up 21.1% year on year. This print exceeded analysts’ expectations by 3.5%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ adjusted operating income estimates and full-year EBITDA guidance exceeding analysts’ expectations.
"Quanta delivered a strong first half of the year, with our second quarter results reflecting another quarter of double-digit growth in revenue, adjusted EBITDA and adjusted earnings per share and record total backlog of $35.8 billion. These results reflect Quanta's ability to provide certainty through the power of our portfolio and world-class execution. Demand for our services remains resilient, fueled by our customers' multi-year programs to build the power grid, generation and energy infrastructure necessary to support load growth from technology adoption and manufacturing reshoring and a focus on reliability and security," said Duke Austin, President and Chief Executive Officer of Quanta Services.
Quanta achieved the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 6.4% since reporting and currently trades at $437.49.
Best Q2: Ameresco (NYSE: AMRC)
Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE: AMRC) provides energy and renewable energy solutions for various sectors.
Ameresco reported revenues of $472.3 million, up 7.8% year on year, outperforming analysts’ expectations by 13%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 151% since reporting. It currently trades at $42.
Is now the time to buy Ameresco? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: FTAI Infrastructure (NASDAQ: FIP)
Spun off from FTAI Aviation in 2021, FTAI Infrastructure (NASDAQ: FIP) invests in and operates infrastructure and related assets across the transportation and energy sectors.
FTAI Infrastructure reported revenues of $122.3 million, up 44.1% year on year, falling short of analysts’ expectations by 9.8%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and EBITDA estimates.
FTAI Infrastructure delivered the fastest revenue growth but had the weakest performance against analyst estimates in the group. As expected, the stock is down 11.9% since the results and currently trades at $5.50.
Read our full analysis of FTAI Infrastructure’s results here.
MDU Resources (NYSE: MDU)
Founded to provide electricity to towns in Minnesota, MDU Resources (NYSE: MDU) provides products and services in the utilities and construction materials industries.
MDU Resources reported revenues of $351.2 million, up 1.9% year on year. This result topped analysts’ expectations by 15.9%. Zooming out, it was a slower quarter as it logged a significant miss of analysts’ EBITDA estimates and full-year EPS guidance missing analysts’ expectations.
MDU Resources achieved the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 8.6% since reporting and currently trades at $19.
Read our full, actionable report on MDU Resources here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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