Analyst: EMCOR ends 2004 with good quarter.

By Richard Lee, The Stamford Advocate, Conn. Knight Ridder/Tribune Business News

Mar. 1--Strategic management decisions and an improving economy have resulted in dramatically improved fourth-quarter and annual net income for the 2004 fiscal year at EMCOR Inc. in Norwalk.

The publicly traded construction and facilities management company guided revenues downward this year, while projecting profits will be up. EMCOR's net income for the Dec. 31 quarter was $10.6 million, or 68 cents per diluted share, a significant increase compared with net income of $2.6 million, or 17 per diluted share, in the 2003 fourth quarter.

For all of last year, EMCOR reported net income of $33.2 million, or $2.13 per diluted share, an increase of 61 percent over net income of $20.6 million, or $1.33 per diluted share, in the same period a year ago. Fourth-quarter operating income was $23.3 million, compared with $9.3 million a year ago.

"Our results confirmed our expectations that 2004 would be a transitional year for the company, with a weaker than usual first half, followed by acceleration in the last six months of the year," said EMCOR Chairman and Chief Executive Officer Frank MacInnis. "We also noted that the rate of our earnings acceleration would depend upon the rate of the overall economic recovery."

EMCOR's electrical business improved, particularly in the transportation, financial services and health-care markets, he said, and its United Kingdom operations were up over 2003. Likewise, its facilities services business showed growth for both the quarter and year.

The company, which has 27,000 employees, including 100 at its headquarters in Norwalk, saw a $1.8 million gain on the sale of the U.K. subsidiary's equity investment in a South African facilities management joint venture. Management at EMCOR, which has about 70 subsidiaries and joint ventures in the United States, Canada and the United Kingdom, pared back on some units last year and pruned services at 19 mechanical businesses in the Midwest it bought several years ago, MacInnis said. It reduced operations at a California unit.