Emcor Group (EME), a provider of electrical and mechanical construction and facilities services, has recorded an 89.94 percent surge in profit for the quarter ended Jun. 30, 2014, driven by expansion in operating margin.
The company earned $39.91 million or $0.59 a share in the second-quarter compared with $21.01 million or $0.31 a share a year ago. Adjusted earnings per share met the analysts' expectation of $0.61.
Revenue during the second-quarter went up marginally 0.08 percent to $1558.06 million from $1556.75 million in the last year period.
Gross margin expanded by 244 basis points over the previous year period to 14.10 percent. Total expenses as a percentage of revenues decreased to 95.65 percent from 97.68 percent in the same period last year. That has resulted in improvement of 203 basis points in operating margins to 4.35 percent.
The company disclosed operating income of $67.74 million, compared with $36.10 million in the last year period.
Tony Guzzi, president and CEO of EMCOR Group commented, "Our performance for the second quarter highlights the diverse strength of our businesses and resulted in overall improved profitability in a choppy environment. We are pleased with the mix of projects we are working on today and the strength of our backlog, despite the pace of the non-residential construction recovery being somewhat slower than originally expected."
Cash Flow
Emcor Group has generated cash of $39.64 million from operating activities during the first half, as against cash outgo of $52.21 million in the last year period.
The company has spent $14.43 million cash to meet investing activities during the first half, as against cash outgo of $10.39 million in the last year period. It has made net capital expenditure of $13.95 million during the first half, which was lower by 0.07 percent or $0.01 million, from a year ago.
The company has spent $29.64 million cash to meet financing activities during the first half, as against cash outgo of $8.06 million in the last year period. It has made net repayment of $9.60 million debt during the first half. It has spent net of $12.05 million on repurchase of common stocks.
The company's cash dividend payment increased 139.18 percent or $7.07 million to $12.14 million. Dividend payment accounted for 30.63 percent of operating cash flow for the first half, compared with 9.72 percent in the same period previous year.
As on Jun. 30, 2014, the company's cash balance stood at $437.12 million, down 17.58 percent or $93.27 million from Jun. 30, 2013.
Working Capital
Emcor Group has witnessed a decline in the working capital over the last one year. The company's working capital stood at $703.29 million as at Jun. 30, 2014, down $103.78 million or 12.86 percent from $807.07 million on Jun. 30, 2013. It registered a decrease in current ratio to 1.59 as at Jun. 30, 2014 from 1.64 on Jun. 30, 2013.
Debt Position
Emcor Group has witnessed an increase in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $345.27 million, up 122.49 percent or $190.09 million, from Jun. 30, 2013.
The company total debt was 10.14 percent of total assets as on Jun. 30, 2014, compared with 5.00 percent on Jun. 30, 2013.
Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 30.21 from 20.46 in the same period last year.
Shares of the company gained 13 cents or 0.31 percent to close at $42.57 on Monday.
