MYRG
Myr Group INC
NASDAQ
8-K: MYR Group Inc. Reports Mixed Third Quarter Results Amidst Revenue Decline
Sentiment:
Quarterly Report
30 October 2024 4:03 PM
MYR Group Inc. announced a decrease in third-quarter revenue and net income compared to the previous year, despite a strong backlog and active bidding environment.
Worse than expected
The company's third-quarter revenue and net income were lower than the same period last year.
The company's gross margin decreased compared to the same period last year.
The company's earnings per share were lower than the same period last year.
Summary
- MYR Group Inc. reported third-quarter 2024 revenues of $888.0 million, a 5.5% decrease compared to the same period in 2023.
- Net income for the quarter was $10.6 million, or $0.65 per diluted share, down from $21.5 million, or $1.28 per diluted share, in the third quarter of 2023.
- The company's EBITDA for the third quarter was $37.2 million, compared to $47.0 million in the same quarter of the previous year.
- The Transmission and Distribution (T&D) segment saw a 12.2% revenue decrease, while the Commercial and Industrial (C&I) segment experienced a 3.9% increase in revenue.
- Gross profit decreased to $77.3 million, with a gross margin of 8.7%, down from 9.8% in the third quarter of 2023.
- For the first nine months of 2024, revenues were $2.53 billion, a 4.1% decrease compared to the same period in 2023.
- Net income for the first nine months was $14.3 million, or $0.86 per diluted share, compared to $66.9 million, or $3.98 per diluted share, in the first nine months of 2023.
- The company's backlog was $2.60 billion as of September 30, 2024, a slight decrease from $2.62 billion at September 30, 2023.
Sentiment
Score: 4
Explanation: The document presents a mixed picture with significant declines in revenue and profitability, offset by a strong backlog and some positive trends in the C&I segment. The overall tone is cautious due to the challenges faced in project execution and margin compression.
Positives
- The Commercial and Industrial (C&I) segment saw a 3.9% increase in quarterly revenue.
- The company's backlog remains strong at $2.60 billion.
- Selling, general and administrative expenses (SG&A) decreased to $57.5 million for the third quarter of 2024, compared to $59.9 million for the third quarter of 2023.
- There was better-than-anticipated productivity and a favorable change order that partially offset margin decreases.
- The company has $375.5 million of borrowing availability under its $490 million revolving credit facility.
Negatives
- Third-quarter revenues decreased by 5.5% compared to the same period last year.
- Net income for the third quarter decreased significantly to $10.6 million, or $0.65 per diluted share.
- Gross profit decreased due to lower margin and lower revenues.
- Gross margin decreased to 8.7% for the third quarter of 2024 from 9.8% for the third quarter of 2023.
- The Transmission and Distribution (T&D) segment experienced a 12.2% decrease in quarterly revenue.
- Net income for the first nine months of 2024 was significantly lower at $14.3 million, or $0.86 per diluted share, compared to $66.9 million, or $3.98 per diluted share, in the same period of 2023.
- The company experienced unfavorable impacts from clean energy projects in T&D and a C&I project.
Risks
- The company faces risks related to project execution, particularly in the T&D segment.
- Unfavorable impacts from clean energy projects and specific C&I projects are affecting profitability.
- There are risks associated with labor and project inefficiencies.
- Changes in estimates of gross profit on certain projects resulted in gross margin decreases.
- The company is experiencing increased costs associated with schedule compression on certain projects.
- The company is exposed to risks related to unfavorable job closeouts and change orders.
Future Outlook
The company's core markets remain active, and bidding activity is robust. Opportunities for long-term growth are considered healthy as the company continues to expand customer relationships. The company expects to resolve unfavorable impacts from a relatively small group of projects expected to complete this year.
Management Comments
- Rick Swartz, MYR's President and CEO, stated that core markets remain active and bidding activity is robust.
- Mr. Swartz also mentioned that third-quarter performance showed improvement over the second quarter, demonstrating strong project execution in core areas of the business.
Industry Context
The results reflect a mixed performance in the electrical contracting industry, with some segments experiencing growth while others face challenges. The decrease in T&D revenue may indicate a slowdown in transmission projects, while the increase in C&I revenue suggests strength in commercial and industrial construction. The company's focus on clean energy projects is also impacting margins.
Comparison to Industry Standards
- Comparing MYR Group to Quanta Services (PWR), a major competitor in the infrastructure services sector, Quanta has shown more consistent revenue growth in recent quarters, while MYR's results indicate some volatility.
- Compared to smaller players like MasTec (MTZ), MYR's backlog is relatively strong, but its margin performance is weaker, suggesting potential issues with project execution or cost management.
- In terms of project types, MYR's challenges with clean energy projects contrast with some competitors who have seen more success in this area, indicating a need for MYR to improve its project management in this sector.
- Looking at global benchmarks, companies in similar sectors in Europe and Asia are also facing challenges with supply chain issues and labor costs, but MYR's specific issues with project closeouts and change orders seem to be more company-specific.
Stakeholder Impact
- Shareholders will be concerned about the decrease in revenue and net income.
- Employees may be affected by the company's efforts to improve project execution and efficiency.
- Customers may be impacted by the company's ability to deliver projects on time and within budget.
- Suppliers may be affected by changes in the company's project pipeline and spending.
Next Steps
- The company will host a conference call on October 31, 2024, to discuss the third-quarter results.
- The company will continue to focus on resolving unfavorable impacts from certain projects.
Key Dates
- October 30, 2024: Date of the earnings release and 8-K filing.
- October 31, 2024: Date of the conference call to discuss third-quarter results.
- September 30, 2024: End of the third quarter and date of balance sheet data.
Keywords
electrical contracting, infrastructure, transmission, distribution, commercial, industrial, revenue, net income, EBITDA, backlog, gross margin
MYRG
Myr Group INC
NASDAQ
Sector: Industrials
Filings with Classifications
Better than expected
30 April 2025 8:05 PM
Quarterly Report
- The company's net income increased from $18.9 million to $23.3 million year over year.
- The company's gross margin increased from 10.6% to 11.6% year over year.
- The company's EBITDA increased from $39.8 million to $50.2 million year over year.
Better than expected
30 April 2025 4:02 PM
Earnings Release
- The company's revenue, net income, and EBITDA all increased compared to the same period in the previous year, indicating improved financial performance.
Worse than expected
10 March 2025 4:04 PM
Investor Presentation
- Net income, EBITDA, earnings per share, and free cash flow decreased in 2024 compared to 2023.
Worse than expected
5 March 2025 4:29 PM
Proxy Statement
- The company's revenues decreased by 7.7% in 2024 compared to 2023.
- The company's net income decreased significantly in 2024, dropping from $91.0 million in 2023 to $30.3 million.
Delay expected
26 February 2025 4:08 PM
Annual Results
- The decrease in C&I revenue was primarily due to the delayed start of certain projects in 2024.
Worse than expected
26 February 2025 4:08 PM
Annual Results
- The company's revenue decreased by 7.7% to $3.36 billion in 2024 from $3.64 billion in 2023.
- The company's net income decreased significantly to $30.3 million in 2024 from $91.0 million in 2023.
- The company's gross margin decreased to 8.6% in 2024 compared to 10.0% for the year ended December 31, 2023.
Delay expected
26 February 2025 4:03 PM
Earnings Release
- The C&I segment experienced a decrease in revenue due to the delayed start of certain projects in 2024.
Worse than expected
26 February 2025 4:03 PM
Earnings Release
- The company's revenue and net income decreased for both the fourth quarter and the full year compared to the previous year.
Better than expected
6 November 2024 4:04 PM
Investor Presentation
- The company's third quarter performance showed improvement over the second quarter, demonstrating strong project execution in core areas of the business.
Delay expected
30 October 2024 4:06 PM
Quarterly Report
- The company's financial results are being affected by delays due to supply chain disruptions and regulatory slowdowns.
- Schedule extensions caused by owner-furnished panel delays led to increased costs on two clean energy projects.
Worse than expected
30 October 2024 4:06 PM
Quarterly Report
- The company's gross margin and net income were significantly lower than the same period last year due to unfavorable project estimate adjustments.
- The Transmission and Distribution segment experienced a significant decrease in operating income.
- The company's effective tax rate increased due to higher permanent difference items.
Worse than expected
30 October 2024 4:03 PM
Quarterly Report
- The company's third-quarter revenue and net income were lower than the same period last year.
- The company's gross margin decreased compared to the same period last year.
- The company's earnings per share were lower than the same period last year.
Worse than expected
21 August 2024 4:29 PM
Investor Presentation
- The company reported a net loss of $15.3 million in Q2 2024, which is worse than expected due to project timing issues.
Worse than expected
31 July 2024 4:26 PM
Quarterly Report
- The company's net income was significantly lower than expected due to significant changes in project cost estimates.
- The company's gross margin was significantly lower than expected due to significant changes in project cost estimates.
- The company's revenue was lower than expected due to a decrease in revenue on transmission projects, a decrease in C&I revenue, and a decrease in revenue on distribution projects.
Delay expected
31 July 2024 4:26 PM
Quarterly Report
- The company's financial results are expected to continue to be affected by delays and cost volatility through 2024 due to supply chain disruptions, inflationary pressures, tariffs and regulatory slowdowns.
- The company experienced a decrease in C&I revenue due to the delayed start of certain projects.
Delay expected
31 July 2024 4:16 PM
Quarterly Report
- The Commercial and Industrial (C&I) segment reported a decrease in quarterly revenues primarily due to the delayed start of certain projects.
Worse than expected
31 July 2024 4:16 PM
Quarterly Report
- The company reported a net loss of $15.3 million for the second quarter, a significant downturn compared to the net income of $22.3 million in the same period last year.
- EBITDA for the second quarter was ($4.7) million, a substantial decrease from $47.1 million in the second quarter of 2023.
- Gross margin decreased to 4.9% in the second quarter of 2024, down from 10.1% in the second quarter of 2023.
Better than expected
8 May 2024 4:02 PM
Investor Presentation
- The company achieved record revenue and EPS in 2023, exceeding previous results.
- The company's LTM revenue as of March 31, 2024, reached a record high of $3.65 billion.
- The company has a strong backlog of $2.43 billion, indicating future growth potential.
Delay expected
1 May 2024 4:25 PM
Quarterly Report
- The company expects financial results to be affected by delays due to supply chain disruptions and regulatory slowdowns.
- The C&I segment experienced a revenue decrease due to the delayed start of certain projects.
Worse than expected
1 May 2024 4:25 PM
Quarterly Report
- Net income decreased compared to the same quarter last year.
- Project estimate changes negatively impacted gross margin and operating income.
- Backlog decreased from the previous quarter.
Delay expected
1 May 2024 4:08 PM
Quarterly Report
- The Commercial and Industrial segment experienced a revenue decrease due to the delayed start of certain projects.
Worse than expected
1 May 2024 4:08 PM
Quarterly Report
- Net income decreased from $23.2 million to $18.9 million year-over-year.
- EBITDA decreased from $41.3 million to $39.8 million year-over-year.
- Backlog decreased from $2.67 billion to $2.43 billion year-over-year.
Better than expected
5 March 2024 4:06 PM
Investor Presentation
- The company achieved record revenue, net income, earnings per share, and EBITDA for the full year 2023, indicating better than expected results.
- The company's backlog of $2.51 billion demonstrates strong future demand, exceeding expectations.
Worse than expected
28 February 2024 4:16 PM
Annual Results
- The company's gross margin decreased to 10.0% in 2023 from 11.4% in 2022, primarily due to significant changes in estimated gross profit on certain projects.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.