As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the energy products and services industry, including FTAI Infrastructure (NASDAQ: FIP) 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 very strong Q1. As a group, revenues beat analysts’ consensus estimates by 3.4%.
Thankfully, share prices of the companies have been resilient as they are up 9.6% on average since the latest earnings results.
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 $96.16 million, up 16.5% year on year. This print fell short of analysts’ expectations by 10.8%, but it was still a strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
FTAI Infrastructure delivered the weakest performance against analyst estimates of the whole group. Interestingly, the stock is up 4.1% since reporting and currently trades at $4.85.
Is now the time to buy FTAI Infrastructure? Access our full analysis of the earnings results here, it’s free.
Best Q1: 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 $352.8 million, up 18.2% year on year, outperforming analysts’ expectations by 14.9%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Ameresco delivered the biggest analyst estimates beat and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 25.8% since reporting. It currently trades at $14.55.
Is now the time to buy Ameresco? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $674.8 million, up 14.7% year on year, exceeding analysts’ expectations by 3.3%. It was a satisfactory quarter as it also posted a narrow beat of analysts’ EBITDA estimates but full-year EPS guidance slightly missing analysts’ expectations.
MDU Resources delivered the slowest revenue growth in the group. As expected, the stock is down 5.1% since the results and currently trades at $16.71.
Read our full analysis of MDU Resources’s results here.
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 $6.23 billion, up 23.9% year on year. This result surpassed analysts’ expectations by 6.2%. It was a very strong quarter as it also put up an impressive beat of analysts’ adjusted operating income estimates.
Quanta achieved the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 13.7% since reporting and currently trades at $332.36.
Read our full, actionable report on Quanta here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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