On the Upswing
Perhaps it's no surprise that EMCOR's per-share price has climbed recently. Given the company's earnings in the second quarter of 2016, EMCOR appears to be on the upswing among electrical construction, industrial and energy infrastructure and facilities services providers.
EMCOR recorded $1.93 billion in revenues in 2Q16 – a 17% year-to-year increase and a record total for any quarter in the business' history. Also, EMCOR increased its net income from $47 million in 2Q15 to $56.5 million one year later.
U.S. Industrial Services Growth Drives EMCOR in 2Q16
Tony Guzzi, EMCOR's CEO, said the growth of his company's U.S. industrial services segment played a key role in 2Q16.
EMCOR's U.S. industrial services sector reported 48% organic revenue growth, Guzzi said, and nearly doubled its operating income year to year. Furthermore, this segment recorded more than $333,000 in revenues in 2Q16, up from roughly $225,000 one year earlier.
Of course, EMCOR is more than just a one-trick pony. And in 2Q16, the company recorded year-to-year revenue growth in multiple U.S. business segments, including:
- Building services
- Electrical construction and facilities services
- Mechanical construction and facilities services
EMCOR also increased its operating income in its U.S. industrial services and mechanical construction and facilities services segments in 2Q16 year to year – something that could bode well for the company's future success.
The Future of EMCOR
Going forward, EMCOR could drive revenue growth in a number of business sectors, thanks in part to a new agreement with several banks.
EMCOR last month announced a $1.3 billion agreement with a syndicate of banks that will provide the company with "enhanced flexibility to pursue all strategic growth opportunities," EMCOR Chief Financial Officer Mark Pompa said in a prepared statement.
The agreement consists of a $900 million revolving credit facility and a $400 million term loan, EMCOR stated. In addition, the agreement provides "incremental liquidity as well as extends [EMCOR's] debt maturities," Pompa noted.
With this agreement in place, EMCOR could commit additional resources to myriad business segments. As a result, the company could be better equipped to drive business enhancements and revenue growth over an extended period of time.