EMCOR Group, Inc. Q2 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Revenue reached 2.7 billion dollars, an 11.1 percent increase over Q2 2021. This represents EMCOR’s highest quarterly revenue on record.
  • Diluted EPS was 1.99 dollars, up from 1.78 dollars in Q2 2021.
  • Organic revenue growth was 9.7 percent.
  • Operating margin was 5.1 percent, down from 5.5 percent last year due primarily to supply chain issues and unfavorable project mix.
  • Operating cash flow was 77 million dollars.
  • Remaining performance obligations (RPOs) stood at 6.5 billion dollars, up 27 percent year over year and 15 percent from year-end 2021.
  • EMCOR returned 458 million dollars to shareholders in the first six months of 2022 through share repurchases and dividends.

Segment Performance

  • Electrical Construction revenue grew 14.6 percent year over year. Margin declined to 6.2 percent from 8.7 percent last year due to unfavorable mix, write-downs, and supply chain delays.
  • Mechanical Construction revenue rose 10.1 percent. Margin fell from 7.9 percent to 7.2 percent due to increased construction manager roles and project write-downs.
  • U.S. Building Services revenue grew 10.8 percent. Segment operating margin rose 80 basis points to 5.6 percent, driven by HVAC repair demand and pricing adjustments.

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Operator: Good morning. My name is Andrea, and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Second Quarter 2022 Earnings Call. [Operator Instructions] Note this event is being recorded. Mr. Brad Newman with FTI Consulting, you may begin. Brad Newman: Thank you, Andrea, and good morning, everyone. Welcome to the EMCOR Group Conference Call. We are here today to discuss the company's 2022 second quarter results, which were reported this morning. I would like to turn the call over to Kevin Matz, Executive Vice President of Shared Services, who will introduce management. Kevin, please go ahead. R. Matz: Thanks, Brad, and good morning, everyone. As always, thanks for your interest in EMCOR, and welcome to our earnings [indiscernible] for the second quarter. For those of you who are accessing the call via the Internet and our website, welcome as well, and we hope you arrived at the beginning of our slide presentation that we'll [indiscernible] our remarks today. We [indiscernible] Slide 2. This presentation and discussion contains forward-looking statements and may contain certain non-GAAP financial information. Page 2 of our presentation describes in detail the forward-looking statements and the non-GAAP financial information disclosures. I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides. On Slide 3, we have the executives who are with me to discuss the q

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