Earnings Piled Higher For EMCOR, Comfort Systems in 2023

ENR reports on the financial performance of leading engineering and construction companies.

Profits poured in faster during 2023 at two of construction's biggest specialty contracting companies, EMCOR Group and Comfort Systems USA. Both firms released fourth-quarter and year-end results and discussed them with investment analysts in conference calls in the last days of February.

Norwalk, Conn..-based EMCOR (NYSE-EME) reported fourth quarter and year-end net income of $211.5 million and $633 million, respectively, compared to $126 million and $406 million in 2022.

Revenue for the quarter and year reached $3.3 billion and $12.5 billion, respectively, compared to $2.9 billion and $11 billion in the prior year.

Anthony Guzzi, EMCOR chairman and CEO, noted on its Feb. 28 call that the company's electrical and mechanical-related operating margins were 8.3% and 10.5%, respectively. "The conversion from revenue to operating income by these segments has exceeded our expectations and really is a result of excellent execution, adaptability, smart project selection and favorable contract terms," he said.

Houston-based Comfort Systems (NYSE-FIX) reported fourth quarter and year-end net income of $91.6 million and $323.4 million, respectively, compared to $55.4 million and $245.9 million in 2022. Revenue for the quarter and year reached $1.36 billion and $5.21 billion, compared to $1.11 billion and $4.14 billion in the prior year.

Three out of four dollars of work by Comfort Systems comes from mechanical construction, repair or maintenance, according to the firm. The rest is from electrical-related work.

CEO Brian E. Lane told investment analysts Feb. 23 that its revenue mix continues to "trend toward" work on data centers, life science projects, chip fabrication and battery plants.

"Those industrial customers accounted for 55% of total revenue in 2023, and they are major drivers of [the company's] pipeline and backlog," he said.

"The commercial sector remains active, but it is now a small part of our business at about 19% of revenue," said Lane, although noting that commercial customers provide most of its service revenue.

Deputy Editor Richard Korman helps run ENR's business and legal news and investigations, selects ENR's commentary and oversees editorial content on ENR.com. In 2023 the American Society of Business Publication Editors awarded Richard the Stephen Barr Award, the highest honor for a single feature story or investigation, for his story on the aftermath of a terrible auto crash in Kentucky in 2019, and in 2015 the American Business Media awarded him the Timothy White Award for investigations of surety fraud and workplace bullying. A member of Investigative Reporters and Editors, Richard has been a fellow on drone safety with the McGraw Center for Business Journalism at the Craig Newmark Graduate School of Journalism at CUNY. Richard's freelance writing has appeared in the Seattle Times, the New York Times, Business Week and the websites of The Atlantic and Salon.com. He admires construction projects that finish on time and budget, compensate all team members fairly and record zero fatalities or serious injuries.

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