On August 5, 2024, Sterling Infrastructure Inc (STRL, Financial) released its 8-K filing announcing record financial results for the second quarter of 2024. The company, which specializes in heavy civil infrastructure construction, infrastructure rehabilitation, and residential construction projects, operates through three segments: Transportation Solutions, E-Infrastructure Solutions, and Building Solutions.
Q2 2024 Financial Highlights
Sterling Infrastructure Inc (STRL, Financial) reported revenues of $582.8 million for Q2 2024, surpassing the analyst estimate of $563.23 million and reflecting a 12% increase from the prior year. The company achieved a gross margin of 19.3%, up from 17.7% in the same quarter last year. Net income rose by 31% to $51.9 million, or $1.67 per diluted share, exceeding the estimated earnings per share of $1.42.
Segment Performance
The E-Infrastructure Solutions segment, which generates the majority of the company's revenue, saw a 20% increase in operating income, driven by a shift towards large, mission-critical projects such as data centers and manufacturing. Despite a 7% decline in segment revenue, the operating margin expanded by over 480 basis points to 21.4%.
Transportation Solutions delivered a stellar performance with a 54% increase in revenue and a 57% rise in operating profit. This segment's growth was attributed to robust market conditions for infrastructure projects.
Building Solutions experienced a 2% decline in revenue, primarily due to adverse weather conditions in Texas and limited availability of developed land. However, the segment's operating profit grew by 2%, supported by strong performance in the plumbing business.
Financial Achievements and Metrics
Sterling Infrastructure Inc (STRL, Financial) reported EBITDA of $87.0 million for Q2 2024, an 18% increase from the previous year. Cash flows from operations totaled $170.6 million for the first half of 2024, and the company ended the quarter with $540.0 million in cash and cash equivalents. The backlog at the end of June 2024 stood at $2.10 billion, with a combined backlog of $2.45 billion, including unsigned awards.
"Our second quarter results reflect the strength of our diversified portfolio, which delivered 12% revenue growth and a remarkable 31% increase in diluted EPS. Our ongoing focus on margin expansion continues to drive profitability growth that significantly outpaces revenue," stated Joe Cutillo, Sterling’s Chief Executive Officer.
Income Statement Summary
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenues | $582.8 million | $522.3 million |
| Gross Profit | $112.7 million | $92.3 million |
| Net Income | $51.9 million | $39.5 million |
| Diluted EPS | $1.67 | $1.27 |
Balance Sheet and Cash Flow Highlights
As of June 30, 2024, Sterling Infrastructure Inc (STRL, Financial) reported total assets of $1.96 billion, up from $1.78 billion at the end of 2023. The company's cash and cash equivalents increased to $539.9 million from $471.6 million. Total liabilities stood at $1.28 billion, with stockholders' equity rising to $681.0 million.
Outlook and Guidance
Given the strong first-half performance and robust backlog, Sterling Infrastructure Inc (STRL, Financial) has raised its full-year guidance. The company now expects revenue between $2.150 billion and $2.225 billion, net income between $175 million and $180 million, and diluted EPS between $5.60 and $5.75. EBITDA is projected to be in the range of $300 million to $310 million.
"We believe 2024 will be another excellent year for Sterling. Given our strong first half results and backlog position, we are raising our full year guidance," concluded Joe Cutillo.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Sterling Infrastructure Inc for further details.
