Energy Services 2025 Q2 Earnings Misses Targets as Net Loss Widens 513%
Tuesday, May 13, 2025 8:47 am ET
3min read Energy Services of America (ESOA) reported its fiscal 2025 Q2 earnings on May 12th, 2025. The company missed expectations with a substantial widening in net loss and a disappointing decline in gross profit. Despite an 8% increase in revenue to $76.7 million, the company reported a net loss of $6.8 million, or $0.41 per share, compared to a loss of $1.11 million in the prior year. Guidance remains optimistic, anticipating improved performance in the upcoming months.
Revenue
Energy Services achieved a 7.8% year-over-year revenue increase to $76.68 million in Q2 2025, compared to $71.13 million in Q2 2024. The Gas & Water Distribution segment contributed $27.10 million, while Gas & Petroleum Transmission generated $3.40 million. The Electrical, Mechanical, & General segment added $46.18 million, with no unallocated shop expense recorded.
Earnings/Net Income
Energy Services reported a deepened loss of $0.41 per share in 2025 Q2, compared to a loss of $0.07 per share in 2024 Q2. This resulted in a net loss of $6.80 million, a 513.1% increase from the previous year's loss of $1.11 million, indicating a challenging quarter for the company.
Price Action
The stock price of Energy Services edged up 1.64% during the latest trading day, saw a 9.88% increase over the most recent full trading week, and rose 3.77% month-to-date.
Post-Earnings Price Action Review
The strategy of purchasing Energy Services shares following a revenue increase in financial reports and holding for 30 days has underperformed over the past five years. This approach failed to capitalize on positive revenue momentum effectively, as cumulative returns lagged behind the market. The stock closed at $9.90, reflecting a 2.0% decrease over the last three months, despite a 64.73% increase over the past year. The strategy did not account for the company's net loss and gross profit decline, which may have negatively influenced stock performance. Market reactions to earnings misses and negative EPS revisions suggest that revenue growth alone wasn't sufficient to drive significant stock price increases. Investors should consider these limitations and broader market contexts, including earnings performance and sentiment, when strategizing around ESOA or similar stocks.
CEO Commentary
Doug Reynolds, President of Energy Services, highlighted that the second quarter typically sees lower revenues due to weather conditions, which were particularly unfavorable this year and adversely affected fixed cost coverage in the C.J. Hughes business. Despite this, Reynolds expressed optimism regarding the $37 million sequential increase in backlog and expects revenue and profitability to improve during the stronger spring and summer months. He noted strong demand for water distribution driven by private utilities and highlighted the strategic focus on selecting projects with favorable margins and evaluating acquisition opportunities to enhance the company's capabilities.
Guidance
The company anticipates favorable growth prospects for the second half of fiscal 2025 and into fiscal 2026. Energy Services expects continued strong demand for water distribution projects as utilities address deferred pipe replacement needs. Reynolds emphasized a commitment to pursuing projects with better margin profiles and managing workforce requirements. The leadership is optimistic about leveraging current industry tailwinds to drive growth and generate shareholder value moving forward.
Additional News
Energy Services of America (NASDAQ: ESOA) recently completed the acquisition of Tribute Contracting & Consultants, a move expected to bolster its capabilities in water and wastewater system installations across Ohio, Kentucky, and West Virginia. The acquisition, valued at $24 million, includes $22 million in cash and $2 million in company stock. Additionally, the company announced the initiation of a quarterly cash dividend of $0.03 per share, payable on January 2, 2025, which represents an increase in the annual dividend from $0.06 to $0.12 per share. The company plans to present at the 37th Annual ROTH Conference, engaging with investors and highlighting growth strategies.
Revenue
Energy Services achieved a 7.8% year-over-year revenue increase to $76.68 million in Q2 2025, compared to $71.13 million in Q2 2024. The Gas & Water Distribution segment contributed $27.10 million, while Gas & Petroleum Transmission generated $3.40 million. The Electrical, Mechanical, & General segment added $46.18 million, with no unallocated shop expense recorded.
Earnings/Net Income
Energy Services reported a deepened loss of $0.41 per share in 2025 Q2, compared to a loss of $0.07 per share in 2024 Q2. This resulted in a net loss of $6.80 million, a 513.1% increase from the previous year's loss of $1.11 million, indicating a challenging quarter for the company.
Price Action
The stock price of Energy Services edged up 1.64% during the latest trading day, saw a 9.88% increase over the most recent full trading week, and rose 3.77% month-to-date.
Post-Earnings Price Action Review
The strategy of purchasing Energy Services shares following a revenue increase in financial reports and holding for 30 days has underperformed over the past five years. This approach failed to capitalize on positive revenue momentum effectively, as cumulative returns lagged behind the market. The stock closed at $9.90, reflecting a 2.0% decrease over the last three months, despite a 64.73% increase over the past year. The strategy did not account for the company's net loss and gross profit decline, which may have negatively influenced stock performance. Market reactions to earnings misses and negative EPS revisions suggest that revenue growth alone wasn't sufficient to drive significant stock price increases. Investors should consider these limitations and broader market contexts, including earnings performance and sentiment, when strategizing around ESOA or similar stocks.
CEO Commentary
Doug Reynolds, President of Energy Services, highlighted that the second quarter typically sees lower revenues due to weather conditions, which were particularly unfavorable this year and adversely affected fixed cost coverage in the C.J. Hughes business. Despite this, Reynolds expressed optimism regarding the $37 million sequential increase in backlog and expects revenue and profitability to improve during the stronger spring and summer months. He noted strong demand for water distribution driven by private utilities and highlighted the strategic focus on selecting projects with favorable margins and evaluating acquisition opportunities to enhance the company's capabilities.
Guidance
The company anticipates favorable growth prospects for the second half of fiscal 2025 and into fiscal 2026. Energy Services expects continued strong demand for water distribution projects as utilities address deferred pipe replacement needs. Reynolds emphasized a commitment to pursuing projects with better margin profiles and managing workforce requirements. The leadership is optimistic about leveraging current industry tailwinds to drive growth and generate shareholder value moving forward.
Additional News
Energy Services of America (NASDAQ: ESOA) recently completed the acquisition of Tribute Contracting & Consultants, a move expected to bolster its capabilities in water and wastewater system installations across Ohio, Kentucky, and West Virginia. The acquisition, valued at $24 million, includes $22 million in cash and $2 million in company stock. Additionally, the company announced the initiation of a quarterly cash dividend of $0.03 per share, payable on January 2, 2025, which represents an increase in the annual dividend from $0.06 to $0.12 per share. The company plans to present at the 37th Annual ROTH Conference, engaging with investors and highlighting growth strategies.
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