EME

The 2026 Q2 earnings cycle continues to wind down, with the reporting docket starting to get quiet. The period has been another one of positivity so far, with several companies, including Apple AAPL, EMCOR Group EME, and Johnson & Johnson JNJ, all reporting record-breaking results in one way or another. Apple’s results reflected its strongest June-quarter period ever, with quarterly revenue of $109.4 billion growing 16% year-over-year. Adjusted EPS came in at $2.02, growing an even stronger 29% from the year-ago period. It also reported double-digit revenue growth across iPhone, Mac, and Services, with similar gains in every geographic segment. Its installed base of active devices reached an all-time high across its major product categories, with its overall gross margin seeing a benefit from tariff refunds. As usual, the iPhone accounted for the mega-cap tech giant’s largest revenue source, with sales coming in at $54.3 billion and growing 21.6% year-over-year. Image Source: Zacks Investment Research Though iPhone reflects the greatest portion of sales, the Services category has quickly grown to be another big top line contributor over recent years, with quarterly sales of $30.7 billion reflecting a 12% YoY increase. Apple’s cash-generating abilities have always been a critical part of investor sentiment surrounding the stock, with it also reporting record operating cash flow for its June-quarter period. The strong cash-generating abilities have allowed shares to trade at a premium, with its dividend payouts pleasing investors looking to obtain top-tier tech exposure paired with paydays. EMCOR similarly posted a double-beat relative to our consensus expectations, with revenues of $5.2 billion reflecting a record and growing nearly 20% YoY. Adjusted EPS of $9.06 reflected a second-quarter-specific record, up 35% from the same period last year. The company didn’t just post records across headline figures, though, with remaining performance obligations (RPO) of $17.1 billion similarly reflecting an all-time high and surging 44% YoY. The favorable results were capped off with increased sales and earnings guidance, with the stock sporting a favorable Zacks Rank #1 (Strong Buy). Revenue has shown huge growth over recent years, with the record-high RPO in the release helping keep the overall trajectory bright. Image Source: Zacks Investment Research Johnson & Johnson shares have quietly delivered a huge gain in 2026 so far, up nearly 30%. The gain over the last month has similarly shown nice outperformance relative to the S&P 500, with the recent results leading to positive momentum post-earnings. Sales of $25.3 billion reflected a new quarterly record for the company, growing by a solid 6.6% year-over-year. It also increased both its current fiscal year sales and adjusted EPS guidance, with JNJ now on track to meet its 2026 target of more than $100 billion in annual revenue for the first time in its history. Image Source: Zacks Investment Research Bottom Line The 2026 Q2 earnings season continues to roll along, and results have been positive for many companies, including Apple AAPL, EMCOR Group EME, and Johnson & Johnson JNJ. Not all companies have seen great post-earnings reactions, but the overall earnings landscape remains one of strength. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Johnson & Johnson (JNJ) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. EMCOR Group stock has delivered a very large 5 year return, yet the latest intrinsic value work using a Discounted Cash Flow (DCF) model still points to the shares trading at a sizeable discount to that estimate, while traditional multiples also lean toward an undervalued read. Over the past 5 years, EMCOR Group has returned about 5.4x an initial investment, which puts extra focus on whether the current price already reflects those gains. Expectations for continued cash generation from EMCOR Group’s project and services portfolio can support the valuation, although any pressure on margins or project timing may quickly affect what investors are willing to pay. EMCOR Group screens as undervalued on 6 of 6 valuation checks, which means the broader assessment, including this 6 score, still leans toward the shares being cheap rather than fully priced. The issue now is whether EMCOR Group’s current share price already reflects its cash flow potential, or if the discount to the intrinsic value estimate offers more room for upside. Find out why EMCOR Group's 27.5% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) approach here values EMCOR Group based on its projected future cash generation. The model uses a 2 Stage Free Cash Flow to Equity framework, starting from latest twelve month free cash flow of about $1.18b and building in growing cash flows over the next decade. On that basis, the estimated intrinsic value comes out at about $1,330 per share. Compared with the current share price, this implies an intrinsic discount of roughly 41.6%. In other words, the DCF work suggests EMCOR Group’s cash flow profile supports a valuation that is materially higher than where the stock trades today. The model outcome indicates the stock looks undervalued relative to its estimated cash flow potential. Overall, the DCF assessment points to EMCOR Group stock looking undervalued at current levels. Our Discounted Cash Flow (DCF) analysis suggests EMCOR Group is undervalued by 41.6%. Track this in your watchlist or portfolio, or discover 48 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for EMCOR Group. P/E is a useful check for EMCOR Group because earnings are a key driver of how investors usually value established contractors and service providers. EMCOR Group currently trades on a P/E of about 23.8x, which is below the Construction industry average of roughly 34.3x and under the peer group average of about 37.5x. The fair P/E ratio for EMCOR Group, which blends its growth profile, profitability, size and risk into one benchmark, is estimated at around 32.9x. This is materially higher than the current 23.8x level. That gap implies the stock trades at a discount to where it might sit if the market priced EMCOR Group closer to this tailored fair multiple rather than the current lower earnings valuation. On this earnings multiple check, EMCOR Group stock appears undervalued compared with both its fair P/E and the wider industry. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for EMCOR Group pick up where this valuation puzzle leaves off. They outline the future path for EMCOR Group's growth, margins and earnings that would need to hold for the stock to be worth materially more or materially less than today's price, using the Community page as the home for those scenarios. Where a ratio or model gives a single number, these narratives describe the future conditions behind it so you can see whether that picture continues to match reality over time. One of the top community narratives on EMCOR Group: 21% undervalued Read one of the top narratives on EMCOR Group Do you think there's more to the story for EMCOR Group? Head over to our Community to see what others are saying! For EMCOR Group, both the Discounted Cash Flow (DCF) intrinsic value estimate and the earnings multiple work point in the same direction and suggest the stock still screens as undervalued. The key question is whether cash flows and margins can sustain the profile implied by that intrinsic value, without project delays or compression in profitability. If those cash flows hold up and the P/E moves closer to the tailored fair ratio, the current discount may narrow. If not, the present gap could reflect the market correctly pricing in execution and cycle risk rather than a clear opportunity. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Quanta Services, Inc. PWR appears to be using capital not merely to boost near-term earnings, but to build a broader infrastructure platform capable of compounding growth over the long term. Its second-quarter 2026 performance and recent investments highlight a strategy centered on acquisitions, self-perform capabilities, shareholder returns and balance-sheet discipline.Quanta completed the acquisitions of Phalcon, Enerfab, Percheron and PSD during the second quarter and July 2026 for approximately $1.24 billion in upfront consideration, with the businesses expected to contribute $1.2-$1.4 billion in 2026 revenues and $120-$140 million in adjusted EBITDA. Beyond incremental sales, the deals expand Quanta's electrical, mechanical, fabrication and front-end capabilities while strengthening its exposure to utilities, technology load centers and critical infrastructure.The company is also returning capital to shareholders. PWR authorized a new $1 billion stock repurchase program and maintained its quarterly dividend at 11 cents per share. At the same time, Moody's upgraded its senior unsecured notes rating to Baa2 from Baa3, underscoring improving credit quality despite acquisition spending. Importantly, capital deployment is being supported by stronger cash generation. Quanta reported robust first-half 2026 cash flow and expects 2026 free cash flow of $2-$2.5 billion. Management also sees potential for free cash flow conversion to reach the high end of its targeted range as favorable contracting terms and growth in MEP, EPC and renewables businesses improve working capital.With a record backlog of $53.4 billion and larger utility, generation and technology projects still ahead, Quanta's capital strategy could be creating a platform for more than earnings growth. It may be strengthening its competitive moat and long-term shareholder value. Quanta is indeed leveraging disciplined capital allocation and strong backlog trends to support long-term revenue growth, which is also the game plan of its close peers like EMCOR Group, Inc. EME and Sterling Infrastructure, Inc. STRL.PWR combines strategic acquisitions, shareholder returns and liquidity management, with a record backlog providing significant visibility into future growth. Its new $1 billion share repurchase authorization, quarterly dividend and Moody’s credit-rating upgrade further highlight its financial flexibility. EMCOR similarly benefits from robust cash generation, disciplined acquisitions and shareholder-friendly capital deployment, while its sizable backlog supports continued demand across electrical and mechanical construction. Sterling remains focused on high-return organic opportunities and strategic acquisitions, with backlog strength in E-Infrastructure and Transportation supporting growth.Overall, Quanta stands out for the scale of its backlog and acquisition strategy, while EMCOR and Sterling offer complementary capital-allocation approaches. Together, the companies appear well-positioned to convert infrastructure demand, liquidity and backlog momentum into sustained revenue and shareholder-value growth. PWR stock has gained 20.7% in the past six months, outperforming the Zacks Engineering - R and D Services industry, the Zacks Construction sector and the S&P 500 index. Image Source: Zacks Investment Research PWR stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 37.35, as evidenced by the chart below. Image Source: Zacks Investment Research PWR’s earnings estimates for 2026 and 2027 trended upward in the past 30 days to $16.37 per share and $18.96 per share, respectively. The revised estimates for 2026 and 2027 imply year-over-year growth of 52.3% and 15.8%, respectively. Image Source: Zacks Investment Research Quanta stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quanta Services, Inc. (PWR) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Argan, Inc.’s AGX Power segment delivered a standout performance in the first quarter of fiscal 2027, with gross margin expanding to 23.6% from 20.6% a year ago. The improvement came alongside a sharp increase in activity, as Power revenues rose to $226.7 million from $160.4 million in the year-ago quarter. Gross profit from the segment consequently increased to $53.6 million from $33 million.Argan’s margin expansion was driven squarely by strength in the Power segment, where a more favorable project and contract mix combined with disciplined execution to lift profitability. The early substantial completion of the final Midwest Solar and Battery Project and the completion of the Trumbull Energy Center provided additional upside, helping push consolidated gross margin to 21% from 19% a year earlier. The improvement underscores how effective project execution is translating into stronger company-wide earnings power.The sustainability case is strengthened by the scale of Argan’s existing Power workload. The segment ended the quarter with approximately $2.5 billion of backlog, while consolidated backlog stood at $2.8 billion. Argan’s Power portfolio includes four U.S. gas-fired plants totaling more than 4.1 gigawatts. Several major projects are moving into more active construction phases. These include the 1.2-GW Sandow Lakes Power Station, a 1.4-GW Texas combined-cycle facility, an 860-MW Texas thermal project and a roughly 700-MW combined-cycle plant. Management said construction activity is ramping across several of these projects.Still, sustaining a 23.6% Power margin may be challenging. Management noted that several major projects remain in their early stages and carry execution risks. It also indicated that consolidated blended margins have generally ranged from the high teens to the low 20s. Thus, while the latest margin level may fluctuate, Argan’s strong execution, expanding Power activity and multiyear backlog suggest that earnings could remain robust. As Argan pursues larger power-generation projects, it competes in an infrastructure market that also includes significantly larger contractors such as Quanta Services, Inc. PWR and EMCOR Group, Inc. EME. Unlike these more diversified peers, Argan remains heavily concentrated on power-generation EPC work, with its Power segment accounting for 78% of first-quarter fiscal 2027 revenues and about $2.5 billion of backlog. Quanta is benefiting from broad demand across utility, generation and technology infrastructure. In the second quarter of 2026, revenues reached $9.6 billion, while backlog climbed to a record $53 billion. Management said larger utility-generation and technology load-center programs are still in the early stages and should build over the coming years. Quanta is also expanding its generation capabilities, although it remains selective about contractual risk on combined-cycle projects.EMCOR is seeing similarly strong demand from mission-critical construction. Second-quarter 2026 revenues increased 19.8% to $5.15 billion, while remaining performance obligations surged 44% year over year to a record $17.14 billion. Data centers remain a major growth driver, with Electrical Construction revenues rising 24% and Mechanical Construction revenues climbing 31%. Management also noted that AI data center projects are becoming larger and more complex, with projects increasingly reaching 100-200 MW or developing into multi-building campuses.For Argan, the competitive backdrop reinforces the value of execution. While Quanta and EMCOR bring greater scale and diversification, Argan’s focused expertise in complex gas-fired EPC projects and its 23.6% Power gross margin highlight its ability to generate attractive profitability from a more concentrated project base. Shares of this global provider of consulting services in engineering, procurement and construction have surged 68.5% year to date, outperforming the Zacks Building Products - Miscellaneous industry, the broader Construction sector and the S&P 500 Index. AGX YTD Share Price Performance Image Source: Zacks Investment Research AGX stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 35.6, as evidenced by the chart below. AGX’s P/E Ratio (Forward 12-Month) vs. Industry Image Source: Zacks Investment Research AGX’s earnings estimates for fiscal 2027 and 2028 have remained unchanged in the past 30 days. The revised estimates for fiscal 2027 and 2028 imply year-over-year growth of 38% and 29.4%, respectively. Image Source: Zacks Investment Research AGX’s Zacks RankArgan stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Argan, Inc. (AGX) : Free Stock Analysis Report Quanta Services, Inc. (PWR) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

EMCOR Group, Inc. EME reported strong second-quarter 2026 results on July 30, with both earnings and revenues exceeding the Zacks Consensus Estimate by 25.3% and 9%, respectively. The company also delivered strong year-over-year growth across key metrics. Shares of EMCOR have gained 21.5% since the earnings release, reflecting positive investor sentiment toward its strong execution and raised 2026 guidance. Adjusted earnings per share stood at $9.06, up 34.8% from the prior-year quarter, while revenues of $5.15 billion increased 19.8%. This growth was driven by strong performance across all reportable segments, supported by higher activity in network and communications, institutional, manufacturing and industrial, and warehousing and distribution. Operating margin in the quarter was 10.6%, up 100 basis points year over year from 9.6%, driven by operating leverage and favorable project mix. Supported by strong revenues and improved execution, operating income grew 31.8% year over year to $547.3 million. Furthermore, EMCOR raised its 2026 revenue and earnings guidance, backed by strong demand and record remaining performance obligations. (read more: EME Q2 Earnings Beat Estimates on Broad-Based Growth, Stock Up) Image Source: Zacks Investment Research So far this year, shares of this Connecticut-based infrastructure service provider have gained 33.5%, outperforming the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector and the S&P 500 Index. Let us take a closer look at the factors shaping EMCOR stock’s prospects. EMCOR’s record RPO position is providing a stronger base for revenue growth. At the end of the second quarter of 2026, RPOs reached $17.14 billion, up 44% year over year and 10% sequentially, with 95% of the increase coming organically. Strong bookings across network and communications, water and wastewater, healthcare and institutional markets contributed to the expansion.The broad-based increase reflects healthy customer demand across several end markets rather than reliance on a single area of construction. Large project awards and expanding customer relationships should support future activity, while the record RPO base provides greater visibility into revenue generation. The strength in RPOs also supported EMCOR’s decision to raise its 2026 revenue guidance to $20-$20.5 billion (up from the previous range of $18.50-$19.25 billion) and EPS to $32-$33.25 (up from the previous range of $28.25-$29.75). Growing investment in data center infrastructure is creating a larger opportunity across EMCOR’s Electrical and Mechanical Construction businesses. Second-quarter growth in both segments was led by network and communications activity, with electrical revenues in the market increasing 45% and mechanical revenues more than doubling year over year.The increasing size and complexity of AI-related facilities is also expanding the scope of work available to EMCOR. Higher power requirements and greater cooling needs are increasing the value of electrical and mechanical services, while continued investment in AI infrastructure and digital transformation should support project activity across multiple markets. EMCOR’s diversified market exposure is creating opportunities beyond data center construction. Institutional, commercial and manufacturing and industrial activity all recorded strong growth in the second quarter, while water and wastewater and healthcare also contributed to RPO expansion.This range of end markets gives EMCOR multiple avenues to participate in infrastructure and facility investment. Demand for healthcare facilities, institutional projects, manufacturing capacity, logistics infrastructure and water-related projects should provide a broad base of opportunities as customers invest in new facilities and upgrades. EMCOR is using acquisitions to add capabilities and expand its presence in selected geographic markets. Recent transactions strengthen electrical and industrial capabilities across Wisconsin, Ohio, Florida, Texas and the Chicago area, while also broadening customer relationships and service offerings.The acquired businesses also provide opportunities to enter data center projects through existing customer relationships and technical expertise. EMCOR expects the five acquisitions to contribute $250-$275 million in revenues during the second half of 2026, adding another source of growth alongside strong organic demand. EMCOR’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $31.42 and $35.48 per share, respectively. The estimates for 2026 and 2027 imply year-over-year growth of 21.5% and 12.9%, respectively. The upward revisions reflect the company’s strong project execution, improving operating efficiency and broad-based demand across construction and building services markets. The raised full-year guidance and record operating performance also provide support for the earnings outlook. Image Source: Zacks Investment Research EME stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 24.1, as evidenced by the chart below. Image Source: Zacks Investment Research EMCOR competes closely with Quanta Services, Inc. PWR, Dycom Industries, Inc. DY and MasTec, Inc. MTZ in the infrastructure and engineering construction market.Quanta operates across utility, technology and load center markets, providing electrical, mechanical, civil and fabrication services. Its solutions-based model, broad capabilities and long-standing customer relationships provide a competitive advantage in large and complex infrastructure projects. Quanta is also expanding across technology, power generation and utility markets, increasing exposure to several major infrastructure investment areas. However, exposure to utility capital spending and the timing of large project awards can affect the pace of growth.Meanwhile, Dycom is a pure-play digital infrastructure contractor focused on fiber, broadband and communications network deployment. Strong demand for fiber-to-the-home, long-haul fiber routes and data center connectivity continues to support growth opportunities across the communications market. However, Dycom's concentrated exposure to telecommunications infrastructure increases dependence on customer network investment programs and broadband spending cycles.Conversely, MasTec maintains a diversified infrastructure platform spanning telecommunications, power delivery, clean energy and infrastructure, pipeline and mission-critical construction. This broad exposure allows MasTec to benefit from multiple infrastructure investment themes, including data center development, grid modernization, power generation and natural gas infrastructure. However, project timing across individual end markets can create variability, as seen with near-term deferrals in Communications despite strength across Power Delivery, Pipeline and Clean Energy & Infrastructure.EMCOR’s execution-focused operating model, diversified end-market exposure and balanced project portfolio provide a competitive advantage in terms of stability and demand resilience. However, Quanta’s broad infrastructure capabilities, Dycom’s communications specialization and MasTec’s diversified infrastructure presence may shape competition as investment in digital and critical infrastructure continues to increase. EMCOR’s strong second-quarter performance and raised 2026 guidance reinforce its favorable growth prospects. Record RPOs, broad-based demand across construction markets and rising data center activity are supporting revenue visibility, while improving project execution and operating efficiency are strengthening profitability. Strategic acquisitions also add capabilities and expand the company's reach across attractive infrastructure markets.EME trades at a premium valuation, but the strong earnings outlook and upward revisions provide support for the higher multiple. With a Zacks Rank #1 (Strong Buy) at present, EMCOR remains an attractive choice for investors seeking exposure to infrastructure construction and long-term demand across data centers, industrial facilities and other critical infrastructure markets. You can see the complete list of today’s Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Quanta Services, Inc. (PWR) : Free Stock Analysis Report Dycom Industries, Inc. (DY) : Free Stock Analysis Report MasTec, Inc. (MTZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The main physical hurdle for the 2026 artificial intelligence boom has shifted from semiconductor supply to power infrastructure and grid capacity. Hyperscalers, utilities, and data center developers are investing unprecedented capital to build power-dense facilities with 1.5x to 2x the electrical and mechanical capacity of traditional data centers. With regional electric utility networks struggling to keep up with increasing load growth, major players in specialized engineering and contracting, such as EMCOR Group, Inc. (NYSE:EME) and Quanta Services, Inc. (NYSE:PWR), hold enormous pricing power, multi-year backlog visibility, and structural advantages that go beyond standard macroeconomic cycles. On July 30, EMCOR Group, Inc. (NYSE:EME) provided an example of this strong secular tailwind when it reported record second-quarter 2026 results, sparking an 18% stock jump. Quarterly revenue rose 19.8% year-over-year to $5.15 billion, far exceeding the analyst forecast of $4.71 billion. Diluted earnings per share hit $9.06, crossing expectations of $7.23 by 25.3%. The report's most noteworthy metric was remaining performance obligations, which increased 44% year-over-year to a record $17.14 billion, with broad-based growth across all five operational areas. With visibility stretching across its project portfolio, EMCOR's management increased full-year revenue projection for 2026 to $20.0-$20.5 billion and full-year EPS forecast to $32.00-$33.25. EMCOR Group, Inc. (NYSE:EME) also increased its regional size by completing five bolt-on acquisitions totaling $625 million in trailing revenue, which were aimed at major tech hubs like Austin, Texas, and manufacturing regions in Wisconsin. Quanta Services, Inc. (NYSE:PWR) had an equally strong Q2 result, with the stock rising about 14% after crossing expectations across key operational parameters. Revenue increased 41.1% year-over-year to $9.56 billion, exceeding expectations of $8.53 billion by 12.1%. Adjusted EPS rose 71% year-over-year to $4.24, surpassing expectations by approximately 29%. Quanta's core Electric Infrastructure division led the performance, delivering $7.84 billion in revenue and $898 million in operating income, considerably above Wall Street's expectations of $707 million. Looking at valuations, the two high-flying infrastructure compounders are trading at very different multiples, with Quanta Services, Inc. (NYSE:PWR) trading at a forward price-to-earnings ratio of 37.79x. Hedge fund support continues to be robust, with Insider Monkey's database showing an increase in hedge fund ownership from 90 in Q4 2025 to 94 in Q1 2026, reflecting strong smart-money sentiment. At the same time, EME trades at a far lower forward P/E multiple of 23.43x, even as it generated faster backlog growth and produced a bigger 25.3% quarterly earnings beat. That said, Hedge fund holdings in EMCOR Group, Inc. (NYSE:EME) fell slightly from 65 funds in Q4 2025 to 58 funds in Q1 2026. Both EMCOR Group, Inc. (NYSE:EME) and Quanta Services, Inc. (NYSE:PWR) have strong exposure to the multi-year AI power and grid upgrade cycle. Although Quanta Services serves as a core mega-cap infrastructure holding backed by a labor moat, EMCOR Group has a stronger growth-adjusted value profile with a record $17.14 billion backlog. While we acknowledge the potential of EME as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years Disclosure: None. Follow Insider Monkey on Google News.

Investors might want to bet on Emcor Group (EME), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook. The upward trend in estimate revisions for this construction and maintenance company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For Emcor Group, there has been strong agreement among the covering analysts in raising earnings estimates, which has helped push consensus estimates considerably higher for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The earnings estimate of $8.07 per share for the current quarter represents a change of +22.8% from the number reported a year ago. The Zacks Consensus Estimate for Emcor Group has increased 8.4% over the last 30 days, as three estimates have gone higher compared to no negative revisions. The company is expected to earn $31.42 per share for the full year, which represents a change of +21.5% from the prior-year number. In terms of estimate revisions, the trend for the current year also appears quite encouraging for Emcor Group. Over the past month, three estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 12.06%. The promising estimate revisions have helped Emcor Group earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. Investors have been betting on Emcor Group because of its solid estimate revisions, as evident from the stock's 6.7% gain over the past four weeks. As its earnings growth prospects might push the stock higher, you may consider adding it to your portfolio right away. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EMCOR Group, Inc. (EME) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fluor Corporation FLR is scheduled to report its second-quarter 2026 results on Aug. 7, before the opening bell.In the last reported quarter, the company’s adjusted earnings per share (EPS) and revenues missed the Zacks Consensus Estimate by 78.8% and 3.6%, respectively. On a year-over-year basis, both metrics declined 80.8% and 8%, respectively.Fluor’s earnings topped the consensus mark in one of the trailing four quarters and missed on the remaining three occasions, with a negative average surprise of 13.6%. The Zacks Consensus Estimate for the company’s second-quarter EPS has remained unchanged at 73 cents over the past 60 days. The estimated figure indicates a 69.8% year-over-year rise from 43 cents. Fluor Corporation price-eps-surprise | Fluor Corporation Quote The consensus estimate for revenues is pegged at $3.80 billion, indicating a decline of 4.5% from $3.98 billion reported in the year-ago quarter. Fluor’s top-line performance in the second quarter is expected to have decreased year over year due to the timing of project awards, slower conversion of front-end engineering work into execution activities and softer revenue contributions from the Energy Solutions segment. Geopolitical uncertainties and the potential for supply-chain disruptions are also likely to have weighed on revenue recognition during the quarter.Despite these headwinds, robust demand across data centers, life sciences, power generation, LNG, mining and critical minerals is likely to have supported business activity. These favorable market trends are likely to have resulted in continued contributions from the company’s Urban Solutions (comprising 66.5% of first-quarter 2026 total revenues) and Mission Solutions (comprising 14.3% of first-quarter 2026 total revenues) segments. Besides, a growing pipeline of front-end awards, a high-quality reimbursable backlog and disciplined project selection are likely to have partially offset the revenue decline. Fluor’s bottom-line performance in the second quarter is expected to have increased year over year, supported by higher-margin new awards, disciplined project selection and an increasing mix of reimbursable contracts. Continued execution of quality backlog, improving commercial terms and higher margins on newly awarded projects are also likely to have supported profitability during the quarter.Although geopolitical uncertainty and potential supply-chain disruptions remain as risks, the company’s focus on building a higher-quality backlog, maintaining commercial discipline and expanding front-end engineering opportunities is likely to have supported margins during the quarter. Our proven model does not conclusively predict an earnings beat for Fluor this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. Unfortunately, this is not the case here, as you will see below.Earnings ESP: FLR has an Earnings ESP of 0.00%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: The company currently carries a Zacks Rank of 5 (Strong Sell). Here are some companies in the Zacks Construction sector, which per our model, have the right combination of elements to post an earnings beat in the respective quarters to be reported.EMCOR Group, Inc. EME has an Earnings ESP of +7.90% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.EMCOR’s earnings beat estimates in three of the last four quarters, missed on the remaining occasion, the average surprise being 12.2%. EME’s earnings for the third quarter of 2026 are expected to increase 19.9% year over year.United Rentals, Inc. URI currently has an Earnings ESP of +1.42% and a Zacks Rank of 1.URI’s earnings beat estimates in two of the last four quarters, missed on the remaining two occasions, the average surprise being 1%. United Rentals’ earnings for the third quarter of 2026 are expected to increase 16% year over year.Dycom Industries, Inc. DY currently has an Earnings ESP of +0.69% and a Zacks Rank of 3.DY’s earnings beat estimates in each of the trailing four quarters, the average surprise being 25%. Dycom’s earnings for the second quarter of fiscal 2027 are expected to grow 39% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fluor Corporation (FLR) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report United Rentals, Inc. (URI) : Free Stock Analysis Report Dycom Industries, Inc. (DY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

EMCOR Group, Inc. EME reported exceptional second-quarter 2026 financial results with earnings and revenues surpassing the Zacks Consensus Estimate and growing year over year.The quarterly performance was mainly driven by disciplined project execution, favorable project mix and solid demand in key end markets, resulting in elevated contributions from its four reportable segments - U.S. Electrical Construction and Facilities Services, U.S. Mechanical Construction and Facilities Services, U.S. Building Services and U.S. Industrial Services.(read more: EME Q2 Earnings Beat Estimates on Broad-Based Growth, Stock Up) EMCOR exited the second quarter with record remaining performance obligations (RPOs) of $17.14 billion, representing a 43.9% year-over-year increase and 29.3% from year-end 2025. The construction segments accounted for most of the balance, with $9.31 billion in mechanical construction and $6.33 billion in electrical construction. The backlog expansion was broad-based, with particularly strong growth across network & communications, water & wastewater, healthcare and institutional markets.According to management, investments in AI infrastructure and digital transformation are generating unprecedented activity within the network & communications market, where demand for mission-critical facilities remains exceptionally strong. EME also continues to benefit from its ability to secure large-scale, complex projects across multiple customers, geographies and skilled trades, reflecting disciplined bidding and execution capabilities. EMCOR Group, Inc. price-consensus-eps-surprise-chart | EMCOR Group, Inc. Quote Importantly, the record RPOs provide significant revenue visibility heading into the second half of 2026 and beyond. Management believes the diverse backlog, combined with sustained customer investments in AI-driven infrastructure and essential public projects, positions EMCOR to continue converting project awards into profitable growth while maintaining pricing discipline and operational excellence across its construction platforms. EMCOR significantly strengthened its long-term competitive positioning through an active acquisition strategy during the second quarter. The company completed or signed definitive agreements for five electrical contracting businesses — B&B Electric, Sidney Electric, Giles Electric, Schmidt Electric and Connelly Electric — which together generated approximately $625 million in trailing 12-month revenues and $105 million in EBITDA. The acquisitions expand EMCOR's footprint across Wisconsin, Ohio, Florida, Texas and Illinois, and deepen capabilities in high-tech manufacturing, healthcare, institutional, manufacturing & industrial, and network & communications markets.Management emphasized that beyond expanding local market presence, these companies can be integrated into EMCOR's broader customer network and increasingly deployed on higher-value data center projects, particularly in fast-growing markets such as Austin, Central Texas, Daytona Beach and the Chicago suburbs. The company expects these acquisitions to contribute $250-$275 million in revenues during the second half of 2026.EMCOR also highlighted that its acquisition strategy focuses on generating long-term revenue synergies rather than simply extracting cost savings, creating a compounding growth platform that enhances technical expertise, customer relationships and geographic diversification. Beyond AI infrastructure, EMCOR continues to benefit from healthy demand across a wide range of resilient end markets, reducing its reliance on any single customer or industry. Management highlighted continued strength in water & wastewater, high-tech manufacturing, healthcare, institutional, manufacturing and industrial, alongside robust demand for fire life safety services. EME also noted improving activity in warehousing, distribution and logistics projects, while HVAC retrofit work, building controls modernization, indoor air quality (IAQ) upgrades and energy-efficiency projects continue to generate meaningful aftermarket opportunities.To support this expanding project pipeline, EMCOR is investing heavily in workforce training and development, prefabrication capabilities, Virtual Design and Construction (VDC) and advanced project delivery methods that improve labor productivity and execution quality. Although management acknowledged ongoing macro uncertainties, including tariffs, supply-chain disruptions, commodity price volatility, elevated interest rates and geopolitical risks, it expressed confidence in the company's ability to navigate these challenges through disciplined project selection, pricing and operational execution.Supported by these favorable demand trends, operational investments and record project visibility, EMCOR raised its full-year 2026 revenue guidance to $20-$20.5 billion from $18.5-$19.25 billion previously while increasing its EPS outlook to $32-$33.25 (from $28.25-$29.75 expected earlier). Combined with its diversified market exposure and balanced capital allocation strategy, these operational investments position EMCOR to capitalize on long-term infrastructure spending and sustain profitable growth across multiple economic cycles. EMCOR currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Martin Marietta Materials, Inc. MLM reported outstanding second-quarter 2026 results, wherein adjusted earnings (from continuing operations) and revenues topped the Zacks Consensus Estimate and increased year over year.Martin Marietta’s results benefited from strong organic performance and acquisition contributions. Aggregates shipments increased 17% to a record 61.6 million tons, supported by infrastructure and heavy nonresidential demand. Heavy nonresidential demand also benefits from data center, power-generation and warehouse construction. Martin Marietta raised its 2026 revenue guidance to a range of $7.2-$7.4 billion, with a midpoint of $7.3 billion.CRH plc CRH reported exceptional second-quarter 2026 financial results with adjusted earnings and total revenues topping the Zacks Consensus Estimate and growing year over year. Positive pricing, favorable demand and acquisition contributions supported the quarterly growth. CRH completed 11 acquisitions during the quarter for $1.1 billion.CRH reaffirmed 2026 net income guidance of $3.9-$4.1 billion, adjusted EBITDA guidance of $8.1-$8.5 billion and earnings guidance of $5.60-$6.05 per share. The company expects public infrastructure spending and reindustrialization activity to support demand, while new-build residential conditions remain subdued.Quanta Services, Inc. PWR reported better-than-expected second-quarter 2026 results, with adjusted earnings and revenues beating the Zacks Consensus Estimate. Quanta’s performance benefited from strong demand for grid, generation and data-center infrastructure, broader self-perform capabilities, efficient resource utilization and solid execution across both segments.Quanta increased its 2026 revenue forecast to $39.3-$39.7 billion, representing a $4.55 billion increase at the midpoint from its prior outlook. Adjusted earnings are now projected to be in the range of $16.45-$16.95 per share, while adjusted EBITDA is expected to be between $4.09 billion and $4.21 billion. Free cash flow is forecasted to be in the $2-$2.5 billion range. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Quanta Services, Inc. (PWR) : Free Stock Analysis Report Martin Marietta Materials, Inc. (MLM) : Free Stock Analysis Report CRH PLC (CRH) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Earnings season has continued to chug along, with many S&P 500 companies delivering their quarterly results so far. It’s been another positive reporting cycle, with a nice chunk of companies delivering outsized growth and many speaking favorably about their upcoming periods. There have been several standouts in the cycle so far, including Microsoft MSFT, Bloom Energy BE, and EMCOR Group EME. Bloom Energy delivered rock-solid results in its earnings release, easily beating our consensus expectations. The company posted record quarterly revenue of $1.07 billion, growing 166% year-over-year while also significantly raising its full-year 2026 outlook The growth surge was driven by soaring demand for its solid-oxide fuel cell systems thanks to major U.S. hyperscalers and AI data center operators seeking reliable on-site power. Bloom Energy now expects full-year revenue in a range of $3.9 - $4.2 billion, with positive revisions also flowing in for its next fiscal year following the release. The stock sports a Zacks Rank #1 (Strong Buy), with EPS revisions also remaining on a bullish trajectory across the board. The sales revisions have been particularly potent, helping underpin just how strong the demand picture has become. Image Source: Zacks Investment Research Microsoft posted a double-beat relative to our consensus expectations, with sales growing by 18% YoY alongside 23% YoY growth in earnings. Favorable Intelligent Cloud results and a reaffirmation of its CapEx outlook reflected big positives, both reflecting huge hurdles it needed to clear. Intelligent Cloud revenue came in at $39.3 billion, beating our consensus estimate handily and growing 32% YoY. Cloud growth rates have been closely watched, with accelerating growth generally getting rewarded and decelerating growth raising a lot of scrutiny. The $39.3 billion in Intelligent Cloud revenue reflected a nearly $1.2 billion beat relative to our consensus estimate, the largest we’ve seen over the last seven quarters. Image Source: Zacks Investment Research EPS revisions for the mega-cap giant remain positive for both its current and next fiscal years, a bullish sign. Image Source: Zacks Investment Research EMCOR similarly posted a double-beat relative to our consensus expectations, with revenues of $5.2 billion reflecting a record and growing nearly 20% YoY. Adjusted EPS of $9.06 reflected a second-quarter-specific record, up 35% from the same period last year. The company didn’t just post records across headline figures, though, with remaining performance obligations (RPO) of $17.1 billion similarly reflecting an all-time high and surging 44% YoY. The favorable results were capped off with increased sales and earnings guidance, with the stock sporting a favorable Zacks Rank #2 (Buy). Revenue has shown huge growth over recent years, with the record-high RPO in the release helping keep the overall trajectory bright. Image Source: Zacks Investment Research Bottom Line It’s been an overall strong reporting cycle so far, particularly so for Microsoft MSFT, Bloom Energy BE, and EMCOR Group EME, all of which posted results that have led to strong momentum in the days following the releases. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Bloom Energy Corporation (BE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, July 30, 2026 at 10:30 a.m. ET Director, Financial Planning and Analysis - Lucas Sullivan Chairman, President and Chief Executive Officer - Anthony Guzzi Senior Vice President and Chief Financial Officer - Jason Nalbandian Executive Vice President, Chief Administrative Officer and General Counsel - Maxine Mauricio Operator: Good morning. My name is Dave, and I will be your conference operator today. At this time, I would like to welcome everyone to the EMCOR Group Second Quarter 2026 Earnings Conference Call. . I will now turn the call over to Lucas Sullivan, Director, Financial Planning and Analysis. Mr. Sullivan, you may begin. Lucas Sullivan: Thank you, Dave. Good morning, everyone, and welcome to EMCOR's Second Quarter 2026 Earnings Conference Call. For those of you joining us by webcast, we are at the beginning of our slide presentation that will accompany our remarks today. This presentation will be archived in the Investor Relations section of our website at emcorgroup.com. With me today are Tony Guzzi, our Chairman, President and Chief Executive Officer; Jason Nalbandian, Senior Vice President and EMCOR's Chief Financial Officer; and Maxine Mauricio, Executive Vice President, Chief Administrative Officer and General Counsel. For today's call, Tony will provide comments on our second quarter and discuss our RPOs. Jason will then review the second quarter numbers, then turn it back to Tony to discuss our guidance before we open it up for Q&A. Before we begin, a quick reminder that this presentation and discussion contains certain forward-looking statements and may contain certain non-GAAP financial information. Slide 2 of our presentation describes in detail these forward-looking statements and the non-GAAP financial information disclosures. I encourage everyone to review both disclosures in conjunction with our discussion and accompanying slides. And finally, as a reminder, all financial information discussed during this morning's call is included in our consolidated financial statements within both our earnings press release issued this morning and in our Form 10-Q filed with the Securities and Exchange Commission. And with that, let me turn the call over to Tony. Tony? Anthony Guzzi: Yes. Thank you, Lucas, and good morning, and thanks for joining us today. I'm going to start my remarks on Slide 4. EMCOR delivered another outstanding quarter, highlighted by exceptional organic growth, strong conversion of revenue into operating income and cash flow, continued booking strength and record remaining pro forma obligations or RPOs. These results reflect the consistent execution, operational discipline and customer focus that have defined EMCOR success over many years. Importantly, our strong performance during the first half of 2026, combined with the visibility provided by our record RPOs, supports a substantial increase to our full year 2026 earnings guidance. As we will discuss in more detail later in the call, we also continued to execute our balanced capital allocation strategy, returning significant cash to shareholders, while investing in strategic acquisitions that strengthen our capabilities and deepen our position in attractive end markets to better serve our customers. So let's go to the second quarter. In the second quarter, revenues were $5.15 billion, an increase of 19.8% over the prior year. Excluding the impact of acquisitions and the divestiture of EMCOR U.K. Organic revenue growth was 19.6%. Operating income reached $547 million, resulting in an operating margin of 10.6%, while diluted earnings per share increased by 35% year-over-year to $9.06 in the quarter. These results demonstrate the strength of our business model, the quality of our execution and the sustained demand that we continue to see across many of our core markets. Electrical Construction generated revenue growth of 24% year-over-year, while delivering an impressive operating margin of 13.9%. Mechanical Construction achieved revenue growth of 31% year-over-year with a strong operating margin of 12.5% about 12.5%. These results reflect our ability to execute complex projects across multiple geographies and trades and expand our scope with existing customers and consistently delivered value to our customers on mission-critical projects. Growth across our construction businesses continues to be supported by strength in several sectors. In the quarter, the largest revenue increases were generated in network and communications, which is where our data center business is, institutional, manufacturing and industrial and warehousing and distribution within commercial. Our teams are leveraging industry-leading free fabrication capabilities, virtual design and construction technology, which we refer to as VDC many times, disciplined labor management an advanced project laying to execute these projects safely, efficiently and productively for our customers. Our U.S. Building Services segment also delivered solid performance. Revenues increased 5.6% from the second quarter of 2025, while operating income grew 26.6%. Our Mechanical Services division continues to perform exceptionally well, benefiting from an increased service base as well as customer investments in [ ATAC ] retrofits, control systems upgrades, indoor air quality improvements and energy efficiency initiatives. In addition, the restructuring actions we implemented last year in our site-based services business are generating meaningful benefits through a leaner cost structure and a more profitable portfolio of contracts. Our Industrial Services segment generated revenue growth of 26% year-over-year, led by strong performance within field services, while also delivering year-over-year improvement in profitability. Now I'll ask you to turn to Slide 5. One of the most significant indicators of future growth continues to remain our RPO position. At quarter end, total RPOs reached a record $17.14 billion, an increase of 44% from the prior year, 29% from December. And despite the record organic growth in the quarter, 10% sequential growth from March. Notably, 95% of this growth was organic. This record position provides visibility into future revenue and reflects the strength of customer demand across several sectors. Demand within the network and communications sector led by data centers remains exceptionally strong. We continue to see expanding opportunities as customers invest in AI infrastructure and digital transformation initiatives. Equally important, our RP growth was broad-based with strong bookings in water and wastewater health care and the institutional sectors. Customers continue to place trust in EMCOR as we successfully execute projects and we consistently meet our commitments. Many customers are expanding across geographies and scope in the facilities, geographies, trades and other technical disciplines like our preconstruction. This ability to deepen relationships and grow alongside our customers remains a significant competitive advantage for EMCOR. And with that, I'll turn the call over to Jason to go through the numbers. Jason Nalbandian: Thank you, Tony, and good morning, everyone. Over the next 2 slides, I will cover the operating performance for each of our segments as well as some of the key financial data for the second quarter of 2026 as compared to the second quarter of 2025. I'm going to start on Slide 6. Revenues of $5.15 billion established a quarterly record for EMCOR, increasing 19.8% or 19.6% on an organic basis when excluding acquisitions and adjusting for the sale of EMCOR U.K. Each of our segments experienced meaningful revenue growth contributing to our consolidated performance. Revenues of electrical construction were $1.66 billion, increasing 24%. While this segment did experience increased activity across a number of the market sectors we serve, the majority of its growth in the quarter resulted from greater data center projects within the network and communications market sector, where revenues increased by 45%. Mechanical Construction revenues of $2.3 billion grew by just over 31%. Similar to Electrical, this segment experienced the greatest growth from the network and communications market sector, where revenues more than doubled year-over-year. Increased cooling requirements for data centers, coupled with our expansion into new or adjacent geographies continue to drive more opportunities for this segment. In addition to data centers, Mechanical Construction generated notable revenue growth from several other sectors in which we operate. Specifically, institutional revenues increased 77%, commercial increased by 26% due to a resumption in demand for warehousing, distribution and logistics projects, largely within fire protection, and manufacturing and industrial, including food processing, was up 18%. On a combined basis, our Construction segment generated revenues of $3.96 billion, an increase of 28% and establishing new quarterly revenue records for both segments. Moving to Building Services. Revenues of $837.7 million increased by 5.6%. Revenues of our Mechanical Services division increased by $30 million or nearly 5% driven by broad-based strength across each of their service lines. In addition, the segment's commercial site-based services division returned to growth, experiencing a $14 million or roughly 11% increase in revenues due to the award of new facilities maintenance contracts as well as scope or site expansion with existing customers. Like our construction segments, the performance of Building Services represents a quarterly record for revenues. Industrial Services revenues were $353.8 million, reflecting an increase of nearly 26% driven by our field services division, which benefited from greater turnaround activity higher petrochemical project volume and progress made on a large solar project. Let's move to Slide 7 for operating income. We generated operating income of $547.3 million or 10.6% of revenues, both of which are records for EMCOR for our second quarter. Operating income increased nearly 32% and operating margin expanded by 100 basis points. Looking at each of our segments. Operating income of electrical construction increased by 46.8% and to a quarterly record of $231.4 million due to the revenue growth I previously mentioned, coupled with 210 basis points of operating margin expansion. While the segment did benefit from a 20 basis point reduction in SG&A margin, the vast majority of the increase in operating margin was a result of greater gross profit margin given exceptional field execution and a more favorable project mix. Mechanical Construction had operating income of $286.6 million, which represents a 20.1% increase. As with electrical, operating income for this segment represents a quarterly record. Although down 110 basis points, Mechanical Construction earned a solid 12.5% operating margin which is in line with the segment's average margin over both the last 12- and 24-month periods. Similar to the first quarter and very much as we anticipated, the reduction in operating margin of this segment resulted from a shift in mix that included a greater percentage of revenues from projects where we are acting as either the construction manager or prime contractor and which inherently carry lower-than-average gross profit margins due to reduced markups on materials, equipment and subcontractor costs as well as an increase in the number of GMP or cost-plus contracts. Together, our construction segments grew operating income by over 30% and earned a combined operating margin of 13.1%, an increase of 30 basis points. Building Services generated operating income of $63.4 million, an increase of 26.6%. In addition to the impact of greater revenues, the segment achieved 130 basis points of margin expansion, with operating margin reaching an impressive 7.6%. Given a more favorable project mix, coupled with improved execution, gross profit margin increased by 70 basis points. And due to the restructuring actions we completed within our site-based businesses, SG&A margin decreased by 60 basis points. Operating income for Industrial Services was $9.6 million, a significant improvement versus the year ago period, driven by the increased revenues I previously mentioned. If we turn to Page 8, I'll quickly cover a few highlights not included on the previous slides. Gross profit of $1.02 billion increased by 22.6% and our gross profit margin of 19.8% increased by 40 basis points. While all of our operating segments contributed to the greater gross profit dollars the improvement in gross profit margin resulted from the performance of electrical construction and Building Services, as I just highlighted. SG&A was $475 million or 9.2% of revenues compared to $48.6 million or 9.7% of revenues a year ago. While revenues grew nearly 20%, we obtained meaningful operating leverage during the quarter with SG&A increasing by only 13.5%, resulting in a 50 basis point reduction in quarterly SG&A margin. And lastly, on this page, diluted earnings per share was $9.06, which represents an increase of nearly 35% when compared to the $6.72 earned in last year's second quarter. If we briefly look at Slide 9, you can see the strength of our performance for the first half of the year. Revenues have grown by 19.7% or 18.3% organically, our gross profit margin has improved by 30 basis points, and we successfully leveraged our overhead cost structure, reducing SG&A margin by 50 basis points. This resulted in operating income, which has grown by nearly 30%, along with a record operating margin of 9.7%. Let's turn to Slide 10. Our balance sheet, including $924 million of cash on hand and $1.45 billion of working capital continues to provide us with a competitive advantage and enables us to fund organic growth, pursue strategic M&A and return capital to shareholders, all of which you'll see on the next 2 pages. Although not shown on this slide, we did generate $289.4 million of operating cash flow in the quarter, and on a year-to-date basis, our operating cash flow is now relatively comparable to that of the year ago period despite our growth and the associated increase in working capital. With that, I'll turn the call back over to Tony. Anthony Guzzi: Thanks, and I'm going to go to Page 11, and this is a great page by the way. And so before I get into the guidance, Jason and I are going to talk about the acquisitions and capital allocation. I want to briefly highlight on this page some of our business development activity. We continue to execute our acquisition strategy with a focus on transactions that expand our capabilities and strengthen our core competencies. These acquisitions deepen our trade and technical expertise and broaden our geographic reach to better support our customers in our fastest-growing sectors. These acquisitions actually showcase our playbook and mindset with acquisitions. We look to create a cumulative and compounding impact with our acquisitions that provide durable performance. Further, we know that we have both cost and revenue synergies in the acquisition. In these cases, in most of the cases over the last 5, 8 years, our revenue synergies that we create far outweigh the cost synergies over time. If you like each of these acquisitions in turn, B&B Electric provide us really good capability in Wisconsin. They are a good industrial contractor that can do highly complex work. Sidney Electric in Sidney, Ohio complements the capability we have in Ohio that came through our [ Quibi ] acquisition over 5 years ago. We learned with things like Sidney, who are great industrial contractors that can do health care work that we can pivot them if the data center opportunities become available, and then we can grow them pretty significantly. Giles was actually acquired with our Miller team and provides access to the Daytona Beach market and goes -- will allow us to go down through the growing space market in Florida. Schmidt Electric, market leader in Central Texas and Austin it opens up that market to us. They have the ability to do data center market, but that's where we're going to be able to bring some real capability. They can do the most complex work known, and we've learned that they can pivot into data center work to our customer relationships. So keep the base, grow that and put the data centers on top of it. Likewise, Connelly Electric, we have great businesses in Chicago land area. This is purely complementary and the locals they operate. There are 2 great contracting ability. They bring a design build capability we don't necessarily have on some warehousing and logistics work. And we think we can pivot and we know we can pivot them also to the expanding data center market in the Southern and Western Chicago suburbs. We feel really good. I'm going to let Jason go through. And what's important about all this, you look at this page and they're just names on a page, right? Each one of them have a story of a great operator or a great operating family that have owned the businesses for a long time. And now they've trusted us to take that with them. They're still going to be here. With them take these businesses to the next level with how we know to grow our customer relationships, and we're going to learn from them, too. We talked about the design build capability, some of the prefabrication techniques that they have on specific products. So this is a 2-way street, but I know we feel the pressure to continue to build and make these companies successful is now up to 70 years, in some cases, family legacy and ownership legacy have now entrusted us to take it to the next level, and we don't take that lightly. With that, I'll turn it over to Jason. Jason Nalbandian: Yes. As Tony noted, these businesses will all be included in our Electrical Construction segment, and we do anticipate funding the acquisitions through a combination of cash on hand and to the extent necessary, the borrowing capacity provided by our credit facility. The slide shows here that these 5 businesses collectively generated $625 million of revenues and $105 million of EBITDA during the trailing 12 months ended June 30, and when considering the closing dates for Schmidt and Connelly, which collectively represent approximately 75% of the aggregate revenues and EBITDA presented. Our guidance, which Tony will discuss shortly assumes between $250 million and $275 million of revenue contribution from these 5 acquisitions in the back half of the year. Given the anticipated intangible asset amortization, as well as a reduction in net interest income, the impact to diluted earnings per share will be limited for the remainder of the year. But as backlog amortization rolls off over the succeeding 12 to 18 months, these acquisitions will provide further accretion as supported by their margin profile. If you look on Slide 12, we've provided a summary of our capital allocation both year-to-date as well as over the past 10 years. As that slide shows, we remain committed to our philosophy of balanced capital allocation. When you factor in these pending acquisitions, we expect the mix for full year 2026 to be comparable to that of full year 2025 as a percentage deployed towards M&A increases. I'll turn the call back over to Tony for updated guidance. Anthony Guzzi: Thanks, Jason. And I'm going to be on Page 13 to close this out. Given our strong first half performance and the visibility provided by our record RPO position, we're going to raise full year 2026 guidance, which is outlined on Page 12. Our updated guidance reflects continued demand across several key markets, our success in winning and executing large-scale projects and our confidence in the operational capabilities of our teams. As a reminder, while acquisitions strengthen our long-term earnings power, as Jason just said, the earnings contribution near term on a diluted EPS basis remains moderated by acquisition-related backlog amortization. We now expect to earn revenue of between $20 million and $20.5 billion and diluted earnings per share of between $32 and $33.25. Our outlook assumes strong continued operating performance and margins, disciplined project execution and sustained demand across our core market sectors. We remain focused on maintaining pricing discipline, carefully selecting opportunities and delivering those opportunities to provide exceptional value to our customers. I've said these things before, and I always think they are reiterating. We have 4 enduring fundamentals that we built our company on. First, our commitment to training, innovation and safety. We continue to invest in workforce development, prefabrication, virtual design and construction or VDC, project delivery methods that improve productivity and strengthen execution. Second, our disciplined approach to contract management. Our teams consistently balanced customer service with prudent risk management, particularly on large and complex projects. Third, we do have exceptional field leadership. The dedication and expertise of our foremen, superintendents, project managers, project engineers and operating leaders at the subsidiary level and segment level remain an important differentiator for EMCOR and a major reason why customers continue to choose us. And finally, disciplined capital allocation. We continue to [ fish ] in organic growth, execute strategic acquisitions and return capital to shareholders, creating long-term value while maintaining financial flexibility. Together, these strengths create a durable competitive advantage and position us for continued success. I put this line in here this paragraph in there all the time. I don't know when there hasn't been macroeconomic uncertainties that continue to exist, including geopolitical conflicts, commodity cost fluctuations, equipment lead time volatility. However, our teams have always repeatedly demonstrated their ability to manage through complexity and deliver results. We entered the second half of 2026 with strong momentum and confidence in our ability to continue creating value for our customers and our shareholders. And finally, and probably most importantly, I want to thank all my teammates for their commitment to safety, disciplined execution and customer service. Your dedication has continued to drive EMCOR's performance and our long-term success. Thank you for joining us today. And with that, I will turn the questions over to Dave to open the line so that you can ask Jason and I questions innumerable questions about data centers. With that, I'll turn it over to Dave. Operator: Our first question comes from Adam Thalhimer with Thompson Davis. Adam Thalhimer: I'm going to try not to ask about data centers. Anthony Guzzi: Okay. Great. Adam Thalhimer: Good. I actually wanted to ask more in the semiconductor space, which maybe that's the high-tech manufacturing. But can you talk about the -- any bookings in the quarter or upcoming bids in that sector? Anthony Guzzi: We continue to see opportunities there. Fire life safety has been particularly strong in the data center space. Mechanically, we're doing some important work in Arizona, on top of the fire, life safety work. And we're doing that in multiple locations. And we continue to see opportunities. We're very capable in that market. It's always balancing those opportunities versus other opportunities. For us, high-tech manufacturing also includes pharma and biotech and EV battery. Jason? Jason Nalbandian: Yes. I think if you look at where we stand today versus both year-end and sequentially, so from March, we've had strong bookings. RPOs are up in that space, about 7%, both sequentially and from year-end. I think the compares get a little bit easier for us as the year goes on. So as we continue to book some of this work and the first phase -- the completion of the first phase of semiconductors is behind us in prior years. I think you'll see some growth here, either later this year or early next year. Anthony Guzzi: We are fire life safety, I think, on just about every important site that's being built right now. And mechanically, we're on a couple of them and electrically on some of the low voltage work. We continue to do the work also. Like anything else in contracting, you're balancing that opportunity versus other opportunities in that geographic market. And in some places, the data center market might be stronger and provide us more near-term earnings power. We can always go back and do some of that semiconductor work in some of these markets. Adam Thalhimer: Got it. Okay. Super helpful. And then with all the acquisitions, a lot of other contractors entering your end markets via acquisition. I thought maybe it would be helpful for you to just break down how your capacity, the machine that you guys have built over decades compares to some of the competitors out there? Anthony Guzzi: Yes. I think for the most part, Page 11 -- Page 13, 11? Jason Nalbandian: 11. Anthony Guzzi: 11 is a great example of our machine in action and that machine will continue. First thing we look for is can they execute in the field. So we're not doing anything different today than we were doing 5 years ago or 8 years ago. Doing a little more a little larger, but can they execute in the field? If they can't execute in the field, whether they're a $5 million acquisition or a $400 million acquisition, we're not touching it. Then the second part is, do they share our values? The smaller ones, that's hard to -- a $10 billion acquisition, maybe that's less important because we're going to hold that into one of our existing operations. But if we're going to do a significant acquisition, like some of the ones on Page 11, they got to look at the world the way we do. We're a value-driven company. We have a disciplined operating model. And they have to be willing to share learning and put learning and be willing to accept learning and best practices. And so that hasn't changed. When you look at others in the space, I don't know how they do acquisition or whatever. But to buy into this space, cold and not know how it operates and think you're going to generate synergy. Here's some things I do know over a long period of time. Other than the relationships like that does help bundling mechanical and electrical together at a local site, we are plenty of sites where we're together. We don't very rarely combine a bid. That's not a thing, putting all the trades together typically. The other thing I know I'm pretty sure about is no one's asking the contractor that's doing the utility work and now do the data center work because you're doing the utility work, and I'm pretty sure the site contractors are not the electrical contractor of choice because they did the site work. These trades are very distinct with strong expertise, and I would say that's going to remain that way for a long time. So we're looking for people that are very good at what they do. And in some of them, we think we have substantial growth because what we've learned over time, some -- especially the sort of midsized $50 million to $100 million contractor. If they can do complex work, if they've been working in industrial plants, if they've been working at health care facilities. And let's say there's a data center adjacency with the relationship we have. We're pretty sure we can put them in the data center market in addition to that. And our folks have been great about share of knowledge. And that knowledge starts all the way back or how you're going to estimate it, how you're going to bid it, what are the contractual negotiations look like? All the way through to how do you set up the VDC models, how does that work all the way through to means and methods in the field. What we've learned through time we learn a lot from our acquisitions on means and methods and we learned a lot from them on basic project planning labor, and they learn a lot from us. Overdrawn, but just thought I'd give some highlights. Jason Nalbandian: I also think quickly, if you look at that package of acquisitions we put together, the thing that sets this apart is they're fairly diverse, both in terms of geography when you look at them together and markets they can serve. So I think that diversity gives them the opportunity to grow similar to the way EMCOR has grown over the last several years. Operator: The next question comes from Brent Thielman with Oppenheimer. Brent Thielman: I guess first question, the mechanical margin comparisons, obviously reflects some mix effects, which always seems to be the case, Tony, but Jason, I think you mentioned performance as a prime, a higher proportion of cost plus contracts as some of the factors in the quarter. Is there any sort of change in philosophy here with that business or just something more nuanced in the quarter? Jason Nalbandian: We talked about this in Q1 as well, Brent. And it's very much some of the water and wastewater work that we're doing, some of the food processing work that we're doing. So we had more bookings in that space. We have more revenue coming through some of those contracts. And so it's just a little bit dilutive to margin. It really is more of mix and project based than anything else. Anthony Guzzi: Yes. I mean, 12.5% outstanding performance and we're executing really great across a number of end markets and a number of projects. Jason Nalbandian: Yes. And I think that -- those dynamics remain throughout the rest of the year, but I don't think it's an indication of the philosophical change in terms of all -- we're [ running ] the business as we the way we always have. Brent Thielman: Okay. And then you mentioned with a few of these transactions maybe some plans to pivot some or more of their business towards kind of the data center opportunities that might be within their kind of respective territories. Obviously, you bring the customer relationships to the table. But could you just talk about the capabilities of these operations to do that work? Is it going to require more resources for you to do that effectively, I guess, kind of what gets you comfortable with those businesses potentially pivoting toward that kind of business? Anthony Guzzi: Because we've done it internally. Multiple times, we've taken existing EMCOR companies that have the same profile of these companies. And we've done it with acquisitions already in Ohio that's the best example. But existing EMCOR companies that have the exact capability, the exact kind of mentality these folks have, and we've been able to pivot them pretty successfully into both high-tech manufacturing into data centers. But these are good businesses in their own right, serving the markets that they serve, like Jason said, that's what makes us exciting. Where there's an opportunity to add growth because of the things you identified, and we're pretty sure we can do that. Now what we do is do we implant a couple of our folks at the fill level to help them initially, sure. Do we help them on the front end to make sure the numbers are right or do we help them with contract negotiations? All those things are true. But ultimately, they got to have great field execution, great field supervision to be able to pivot and grow their business with us in those markets. Operator: And the next question comes from Justin Hauke with Baird. Justin Hauke: I've got 2 here. I guess, first one, just clarifying I'm assuming it's probably the case, but the acquisitions, are these all still union contractors like your typical electrical construction markets or the mix? Anthony Guzzi: Yes, they're all unions. [ IBW ] contractors. Justin Hauke: Okay. I figured they were. And then I guess the other question I had was just I wanted to understand the dynamics on raising the margin guidance. Obviously, electric is really strong here. And I know you guys don't manage the margin, you manage gross profits and risk and everything else. But with the mechanical drag and then the incremental amortization from these deals, I guess I'm just surprised that the guidance was raised, given and you've been relatively conservative on that. So just can you walk through what's different that drove that? Jason Nalbandian: I think one of the biggest factors is you can see the acceleration we've had in revenue. And that revenue acceleration is really absorbing a lot of overhead, both some of our indirect within cost of sales and then just SG&A. And so with that revenue growth, we're getting better absorption, we're getting better SG&A leverage. And so with the new revenue guidance, and we said all along, this is really going to be a revenue story for us if there was upside with that new revenue guidance, we feel better about the operating margins because we're going to continue to see that absorption. And then to your point, we had really, really good execution from Electrical and then we saw greater contribution from Building and Industrial. And so when you kind of look at the first half of this year, we see no reason why the back half shouldn't look like the first half. Operator: And the next question comes from Avi Jaroslawicz with UBS. Avinatan Jaroslawicz: So yes, the really strong electrical margins here in Q2. Just wondering if there was anything kind of more unique that drove that strength? Or was it really more just everything going right? Anthony Guzzi: Well, I don't know if everything went right, but -- what it is, is just the ebb and flow of the business. A good point in the business. We always talk about margins in bands, and we're in a pretty good place. We're at the midpoint of what that band would be right now. And we always say margins will fluctuate quarter-to-quarter. But in our guidance is pretty strong performance for Electrical for the remainder of the year. Avinatan Jaroslawicz: Okay. Yes, I was wondering if -- I know last quarter, we spoke about how there was contract mix that was kind of restraining some of the margin percentages and so -- Anthony Guzzi: More mechanical. That's more mechanical. Avinatan Jaroslawicz: Got you. Okay. And then just thinking about the second half of the year, and I know margins move in bands, and this was a nice quarter. But is there any potential that we could see them stay in kind of the 10% plus range or -- is that not realistic? Anthony Guzzi: If you look at our guidance, right, the way we're looking at it is this was a phenomenal quarter. And so I think you really need to take the first half of the year together. And if you look at our guidance effectively if you take the low end, what we believe can happen so take low revenue, low EPS, the implication there on margins is that it's really comparable to the back half of last year. If you take the midpoint, so midpoint revenues, midpoint EPS, the implication there is that the back half of this year looks like the first half of this year. And then the higher end of that guidance implies that we continue to see some better execution, we continue to get more SG&A leverage. But I wouldn't suspect that -- and certainly not baked into our guidance is that this 10.6% margin repeat. It's more like the first half of the year collectively. Jason Nalbandian: There's some seasonal things that work against that, too. The second quarter is always a strong building services quarter. There was a stronger industrial services than we typically have. And look, I'm just going to -- I think when you look at Industrial Services, we talked about the geopolitical risks. It has nothing to do with the business, but the refiners can't shut down for the most part in any substantial way in the back half of the year. So we had a pretty good turnaround season in February, March. I think the turnaround season will not be as strong as it normally can be because of what's happening in the Middle East because they have to keep open and keep producing oil and gas. Now that's a small impact on margins but it's likely to impact margins in the fourth quarter. Operator: And the next question goes to Brian Brophy with Stifel. Brian Brophy: Yes. Congrats on the great quarter. I'll ask a data center question. Obviously, public market investors seem concerned about something as it relates to data centers, but just curious, your discussion with your customers, have you seen any change at all in the demand profile from that end market? Anthony Guzzi: Yes. Short answer, none. The demand profile remains the same. I do think there are some places we're going to build more, right? I think Ohio, Texas, Pennsylvania is a burgeoning market. Arizona has been a strong market. Northern Virginia will continue to be strong. [indiscernible] less of a share of them because just the law of large numbers, other places are [ building ] them. Northwest Indiana and Chicago, Atlantic continue to be important markets, Arizona, and then Georgia and the Carolinas. And they all have one thing in common. They have power and they're willing to build power and the sort of not in your backyard thing, that's going to get play. It's the same people that were against fracking. They really don't want data centers because they don't want natural gas to continue to expand and what has to expand its natural gas to keep this going. And if you look at -- we've done some work on power and where power is going to become available and all that, we are in really good shape to continue to serve those markets. It's sort of laughable that New York put a data center ban on because there's really nothing materially happening in New York with data centers anyway. Brian Brophy: Yes. That's great. And then a question on the GMP mix. I know there's some attention. But in terms of your track mix, can you give us a sense of how much has actually shifted to GMP versus fixed price? Are we talking hundreds of basis points, thousands of base points. Can you just give us a sense the overall percent of mix? Anthony Guzzi: [indiscernible] mechanical, probably shift to mechanical 9% to 10%, which could be meaningful because they're large contracts. And then go back to the point I make about careful contract negotiation, a lot of that's driven by the owners and a lot of that is driven on the mechanical side because these mechanical systems and a lot of times are being done for the first time are being done -- they're fairly complex. And a lot of that GMP mix that shifted, there's always been an element of more GMP and mechanical, but the shift is really coming into the AI data centers. That's prudent both from the end customer, the owner, and that's prudent from us to be taking those contracts that way. Operator: The next question comes from Tim Mulrooney with William Blair. Timothy Mulrooney: Yes. I have 2 questions. My first one is kind of building on your last conversation around state moratoriums and data center bands. As we think about some of these proposals in place at the state and local level, and they're just mostly proposals at this point, but can you help us think about how flexible and transportable your labor is when it comes to these types of projects? Like are there enough of these projects in the works where you can have people drive a few towns over? Or do you have to house these workers in new states, depending on where these projects are moving forward. Curious about your ability around labor capacity and flexibility. Anthony Guzzi: That's one of the benefits of being a union contractor. Because of the demand in some of these states there's a capacity to bring in people from -- they will travel themselves. And then it's not us sort of housing them. They get paid per [indiscernible]. They find a place [indiscernible]. It could be as simple as the folks in Chicago, some of the labor moving up to Northwest Indiana to do the work. And then that local gets built up and they take more of the work. That's one of the benefits they come in. They come in with a level of sophistication. We know what their capabilities are. They check into the local union all and we go to work. And we can help facilitate that in some cases. And so there's that. That's the more traditional way of doing it. And then you get to some of the rural markets which we're participating in, whether it be in some of the world Midwest markets is take Texas. We're finding creative ways to serve Texas, whether it's through more prefabrication on the job and then subcontracting some of the installation or doing it ourselves. You can do it from -- if you're going to do union in some cases, you'll permit nonunion people to be union for a short period of time and use that capacity. And then finally, there are opportunities for some nonunion operations that we may have to participate in very rural markets to look a lot more like how the oil and gas people work than how the traditional IBW or a commercial contractor will work. So you have to be flexible and do all of the above. But mainly, it starts with the trades people themselves as being flexible and looking for the work. I think about these moratoriums and we've done some work on that. We're by far, we're not lobbyists. We don't have -- we're not experts. But when you start to see the level of tax revenues that come into some of these counties, like [ Latin ] County, Virginia, 5%, I think, of the property receipts are now from the data center people. Pretty hard to take a step back when that's been driving your local tax base and your education systems. We think there's plenty of opportunities. And at the end of the day, when we talk to the owners, they're going to find the places that build them, and we are well positioned to do that in the places where they are going to build them. Timothy Mulrooney: I appreciate that extra color there, Tony, on the moratorium too. It's an interesting dynamic that's happening right now. Switching gears, wanted to ask about your backlog, your RPOs. As I look at this, I look at your 1-year RPOs to complete be completed within a year. It typically represents about 50% of your next 12 months revenue. That was true every year basically for the last 4 years, plus or minus a percentage point or 2. It's basically 50%. It's in a very tight range. Is there any practical reason, and I don't know, but is there any practical reason that you could think of for why that might not be the case anymore? Anthony Guzzi: No, I can't think why the future doesn't look like the past. Jason? Jason Nalbandian: Yes, I think the one thing we have to just way as well, right, is we've booked a lot of work in the last 2 quarters. And so I think some of it will be the timing of ramp-up and the timing of mobilization. So if you're looking at growth rates in RPO versus growth rates and guidance and then there's obviously a disconnect, right, our RPO is growing a little bit faster than we're saying our revenues are going to grow that is just the timing of mobilization. We did the level of work we've booked over the last 2 quarters. Anthony Guzzi: Within a band, you're probably about right. I mean we think it's a little different when we come into the year, Jason, we usually think we have about 55% to 65% of enrolled ... Jason Nalbandian: It used to be that we'd have to go and book and earn our annual revenue in that year. That percentage has dropped dramatically. It dropped to 50%, 45%. I think this year, it was 40% of the revenue we had to go book and earn. So I think that's the new norm right now. We do have some projects that are skewing out a little bit longer, right? Historically, we would say that 85% or so of our RPOs burn in 12 months. where we're sitting today, it's more like 75% or 76%. And some of that's the water and waste water mix. Some of it is just the volume of bookings we've had. Timothy Mulrooney: Could it also be project size, Jason? Jason Nalbandian: Absolutely. Absolutely. Anthony Guzzi: That's been increasing. And if you look at the last 2 years, there's really no big shift going on here. Operator: The next question comes from Manish Somaiya with Cantor. Manish Somaiya: Congratulations, everybody. Tony, I wanted to go back to Slide 11 seems to be your favorite slide on M&A. If you can just help us get a better sense as to going forward, what the missing pockets of exposure might be by sector, by market, that would be helpful. And what does the pipeline look like as you look ahead? Anthony Guzzi: The pipeline is strong. And so what we're looking for always is, can we augment existing capability to one of our larger subsidiaries? A great example of that or at a geographic market is Giles in the Miller and Sidney teaming up with [ Quibi ] in Ohio. Those are plastic examples of what we do. We will always do those and that's a big part of what we do. And then there is the sort of stand-alone capability, which would be a B&B, Schmidt and Connelly. B&B, we were not in that part of Wisconsin. It's a good industrial part of Wisconsin. They have the ability to travel some and do some industrial work, and they did really, really good executors. Schmidt brings more Texas to us. We have a fairly strong business in Texas, mechanically and electrically. This just adds to it. And it's in sort of Austin, San Antonio and a little bit in Houston with a great operating team that's known for their technical sophistication. And just great values, right, like all these companies, they all have great values. And then commonly, if you put a chessboard together of what's going on in Northwest Indiana, Illinois, we have 2 great companies, Gibson Electric, which is one of the founding EMCOR companies, [indiscernible] and now Connelly. And it's like a Mosaic chessboard around the city of Chicago, Northwest Indiana is Southern suburbs and it really allows us to serve our customers better. That's what drives most of this as our customers look for us to continue to expand capability. I think when I think of acquisitions, we're going to continue to focus on what we do well which is Mechanical and Electrical Construction and adding on both companies like Sidney, Giles, B&B and also the bigger ones like Schmidt and Connelly. And then also mechanical services, Again, something we do very well. That's where some of the smaller acquisitions are as we build out a branch network. Are we looking to invest in things that we don't know as well? Probably not. We see plenty of white space yet. Both to do the add-ons and also sort of the stand-alone ones. And what we've done over a long period of time, we grow these faster, quite frankly, a lot of times in the rest of the company. And we're looking -- there's a patent I put in there. We're looking for the cumulative and compounding impact. But we want to pay a fair price. But we're very cautious when you think about some companies that are on market companies, exposure to 1 end market, 2 or 3 customers or 1 geography or just a couple of geographies. We found that we can do that as well by putting a mosaic of acquisitions together off of one of our bases and grow pretty strongly in some of those markets. And then we've been very successful at that. Manish Somaiya: And Tony, the $750 million upfront purchase price that you outlined, should we think of these acquisitions having any earn-outs? Anthony Guzzi: There's another -- up to $90 million in earnouts for 2 of the deals. That's the maximum they can be. That's not our prediction of where those will land, but we hope they hit it. Manish Somaiya: And then, Jason, while I have you on the cash flow front, how should we think about cash conversion in second half? And I guess if you will kind of give some sense as to how we should think about '27 as well. Jason Nalbandian: Yes. So obviously, we won't comment on '27 at this point. I think if we look at '26 and we just look at EMCOR as a whole, the philosophy or the algorithm we always have on cash flow is we should be able to have operating cash flow at least equivalent to net income, and that goes up to 80% to 85% of our operating income. So if you look back over the last several years, let's just take '24 and '25 as examples. We see no reason why the operating cash flow in '26 won't look like it did the last 2 years. We obviously are back-half weighted. For us, Q1 is always the weakest and we start to see operating cash flow accelerate in Q3 and Q4. So I think that's going to continue to hold this year as well. Operator: And the next question comes from Adam Bubes with Goldman Sachs. Adam Bubes: Just wondering if you could touch on the size of the data center projects you're seeing in the pipeline, how does that compare to what's in backlog, what you're executing against today? And then to what extent do larger project sizes create opportunities for higher workforce utilization increased revenue per employee? Anthony Guzzi: That actually depends on more the mix. So in general, we're going to get more revenue per employee in the mechanical side than we are on the electrical side. And also the mechanical side allows us to do more prefabrication on modules that have higher value content, especially in the AI data center. When you look at trending up, that's been going on over time, right? You then back in 2019, a 20-megawatt data center was considered large. The way I think about it today, when we're doing cloud storage, we're now building somewhere between 40 and 75 megawatts, give or take. And when there's an AI component, and we have no idea how these things work together, anything. It's not our area of expertise. You're starting to talk 100-plus megawatts, 200 megawatts, and people have all kinds of different things. When they get much above 200, 250, then I think most people are talking about campuses. So 2 things have happened. The size has gone up over the last 5 years. And on the mechanical side, especially, we get a multiplier of 1.5 to 2 on AI data center. And on the electrical side, for an AI data center is probably 1.5 and that's just driven by the size of the electrical coming in, that needed the power of the data center. So they're getting bigger. They're getting more complex, especially when the AIs introduced. And they're usually always built with the idea toward the campus of 3 to 7 buildings that are going to fill out that campus. Adam Bubes: And then you touched on it a little bit earlier, but could you just expand on the opportunity to move into maybe traditionally nonunion regions to serve data centers seem to be expanding into more rural markets? And then maybe Texas, in particular, you acquired the electrical contractor there, but what's the exposure to the state today? And how big could that exposure get over time? Anthony Guzzi: Yes. So exposure to the state today is broad if you bring in the Industrial segment. It's very broad. If you talk about our exposure today as part of the Mechanical and Electrical segment, Mechanical Services has some exposure there. But I think what you're focused on, what's our exposure to the mechanical and electrical segment and what's our exposure broadly. We have pretty good exposure in Central Texas through our Batchelor & Kimball subsidiary. They went out there had not been there. They went out there to build a semiconductor plant. They did a very good job on it. Excellent job for the owner. And that allowed us to build a workforce out there. We followed up with an add-on acquisition in Central Texas mechanically. And we're pretty well positioned to serve both the more metro markets in Central Texas, but also some of the rural markets. Because on the data center market mechanically, could have a large prefabrication component, which allows us to have less labor on the job in those rural markets. When you go electrically, we have a range of options. We already were participating in the DFW market. I would say we're either 1 or 2 supporting the data center market and the Dallas Fort Worth area. That was from an acquisition we made about 7 years ago with an eye towards doing this. They had been doing day 2 work in those data centers with our scale and the capability, I talked about our ability to come down and do that. The team really did a great job learning how to do that. We've expanded that capacity. And I would say we're a significant player in the Dallas-Fort Worth area market and the data center market. Schmidt gives us the opportunity to expand that. Schmidt a terrific full line contractor run by just an exceptional team. We feel really good about our ability bring that capability into Texas. And then we have the ability to leverage some of our other assets in the market to support that in rural Texas where some of the oil and gas folks to maybe help us do that over time. So we're fairly well positioned now in Texas. We'll be, I think, better positioned after these acquisitions. And we'll look to continue to do add-on acquisitions in Texas to support this growth. Unknown Executive: Just 2 facts to round that out. I mean if you look at our non-oil and gas business in Texas, we do $1 billion of revenue there today before Schmidt, before any acquisitions. And if you look at because you have data center specifically. If you look at data center RPOs, Virginia is the state where we have the most activity, but Texas is the second for us and followed closely by Georgia. So Texas is an important market for us. It's one where we have a lot of activity today, and I think that's going to continue to grow. Anthony Guzzi: And I think it shows you our ability to pivot. And if you think about how we grew in Texas, they both were acquisitions that were made pre 2020. Batchelor & Kimball in 2019. We had [ Gallon ] down there, and we added on there in the Houston area, more traditional commercial and health care contractor. The Batchelor Kimball expanded. We acquired a company in Austin mechanically, which helped get us to know the electrical, quite frankly, on Schmidt, and we grew that. And so it's been a good story of acquisitions, great culture with those companies, then organic growth on top of the acquisitions. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Tony Guzzi for any closing remarks. Anthony Guzzi: First, again, I want to reiterate and thank my teammates for outstanding performance over a sustained period of time. I do want to welcome our new teammates in B&B Electric, Sidney, Giles, Schmidt and Connelly. We're thrilled to have you as part of our electric team, and we look forward to closing Schmidt and Connelly here in the third quarter. And then finally, everybody stays safe, and we look forward to continue to execute well for our customers. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends EMCOR Group. The Motley Fool has a disclosure policy. EMCOR (EME) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. EMCOR Group stock has turned a very large five year gain into a fresh valuation question, because both the Discounted Cash Flow (DCF) intrinsic value estimate and the market multiples currently point to the shares trading below what the fundamentals suggest. Over the past five years EMCOR Group has returned roughly 7x, which means anyone looking at the stock today is assessing it after a very strong run rather than early in the move. Expectations that EMCOR Group can continue to convert its project pipeline into steady cash flows may support the current price, while any setback in execution or contract profitability could quickly change how dependable those cash flows look. EMCOR Group screens as undervalued on a broad set of metrics, with 6 out of 6 valuation checks suggesting the market price is below the level implied by those fundamentals. The issue now is whether the current discount to intrinsic value offers a margin of safety that still makes EMCOR Group attractive after such a strong multi year advance. Find out why EMCOR Group's 27.9% return over the last year is lagging behind its peers. The Discounted Cash Flow (DCF) model here takes EMCOR Group’s projected cash generation and translates it into a present value per share. EMCOR Group produced about $1.18b in free cash flow over the latest twelve months, and the model assumes those cash flows grow from this base rather than recover from a weak starting point. On that foundation, the 2 Stage Free Cash Flow to Equity approach arrives at an estimated intrinsic value of about $1,335 per share. Set against the current share price, that intrinsic value suggests the stock is trading at a 40.2% discount. This gap indicates EMCOR Group is priced as if its recent cash flow strength is less repeatable than the model assumes. As a result, investors focused on cash generation may view the setup as interesting, particularly after the long run in the share price. On this DCF view, EMCOR Group stock appears undervalued relative to the cash flows currently implied in the model. Our Discounted Cash Flow (DCF) analysis suggests EMCOR Group is undervalued by 40.2%. Track this in your watchlist or portfolio, or discover 55 more high quality undervalued stocks. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for EMCOR Group. The P/E ratio is a useful lens for EMCOR Group because it anchors the stock price directly to the earnings that support it. EMCOR Group currently trades on a P/E of about 24.4x, which sits well below both the Construction industry average of roughly 34.9x and a peer group average near 44.0x. A fair P/E multiple for EMCOR Group, based on its sector, size and risk profile, is estimated at about 36.8x. That is materially higher than the current 24.4x level. This comparison suggests the market is pricing the company’s earnings at a discount to what this framework implies. For investors who put weight on earnings-based metrics, EMCOR Group screens as attractively priced on this P/E comparison. On the P/E yardstick, EMCOR Group stock appears undervalued relative to both its industry and the fair multiple implied by this framework. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for EMCOR Group pick up where this valuation puzzle leaves off. They spell out the specific assumptions about EMCOR Group's future growth, margins and earnings that would need to hold for the stock to be worth materially more or less than today's price. Each one links its number to a clear view on how growth, profitability and risks might evolve, which you can revisit on the Community page as fresh information comes through. One of the top community narratives on EMCOR Group: 19% undervalued Read one of the top narratives on EMCOR Group Do you think there's more to the story for EMCOR Group? Head over to our Community to see what others are saying! For EMCOR Group, both the Discounted Cash Flow (DCF) intrinsic value estimate and the earnings multiple view point in the same direction, with each suggesting the stock is undervalued and the DCF implying a sizeable 40.2% discount. The broader valuation checks line up with that signal, which makes this less about hunting for a hidden angle and more about judging whether the current cash flow and earnings profile can hold up. The crux from here is whether EMCOR Group can keep converting its backlog into dependable, profitable cash flows without execution stumbles that would justify the current discount as a warning rather than an opportunity. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include EME. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]