Sterling Infrastructure Inc (STRL) Q2 2024 Earnings Call Highlights: Record EPS and Strong ...

GuruFocus News
4 min read

In This Article:

  • Earnings Per Share (EPS): $1.67, up 31% year-over-year.

  • Gross Profit Margin: Over 19%, with a 160 basis point improvement from the previous year.

  • Revenue: $582.8 million, an increase of 11.6% year-over-year.

  • Operating Income: $72.7 million, a 20.7% increase from the prior year.

  • Net Income: $51.9 million, a 31.4% increase year-over-year.

  • EBITDA: $87 million, an 18.3% increase from the previous year.

  • Operating Cash Flow: $121 million for the quarter.

  • Net Cash Position: $211 million.

  • Backlog: $2.1 billion, a 20.9% increase year-over-year.

  • Combined Backlog: $2.45 billion, a 2.2% increase from the prior year.

  • e-Infrastructure Revenue: Increased by 7% in the second quarter.

  • Transportation Solutions Revenue: Increased by 54% year-over-year.

  • Building Solutions Revenue: Declined by 2% in the quarter.

  • Data Center Revenue: Grew more than 100% in the quarter.

  • Cash Flow from Operating Activities (First Half 2024): $170.6 million.

  • Net CapEx (First Half 2024): $44.4 million.

  • Share Repurchases: $30.1 million at an average price of $100.70 per share.

  • Updated Full Year Revenue Guidance: $2.15 billion to $2.225 billion.

  • Updated Full Year Net Income Guidance: $175 million to $180 million.

  • Updated Full Year EBITDA Guidance: $300 million to $310 million.

Release Date: August 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Sterling Infrastructure Inc (NASDAQ:STRL) reported a record second-quarter EPS of $1.67, marking a 31% increase over the prior year.

  • The company's gross profit margins expanded to over 19%, driven by a strategic shift towards higher-margin services.

  • Backlog at the end of the quarter increased by 21% year-over-year, totaling $2.1 billion, indicating strong future demand.

  • Operating cash flow was robust at $121 million, contributing to a strong net cash position of $211 million.

  • The e-infrastructure segment, the largest and highest-margin segment, saw operating profit grow by 20% with margins expanding to 21.4%.

Negative Points

  • Revenue from the small commercial and warehouse markets declined by over $30 million compared to the second quarter of 2023.

  • The manufacturing market faced challenging revenue comparisons due to the start-up of a large project in early 2023.

  • Building solutions segment revenue declined by 2% in the quarter, impacted by heavy rainfall in Texas and land availability challenges.

  • General and administrative expenses increased by $3.8 million due to the PPG acquisition, general inflation, and growth.

  • The company anticipates that the e-commerce and small warehouse markets will remain soft throughout 2024.

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