Third-quarter revenue rose 54% and earnings beat by about 9%. The company did not provide forward guidance and named a new chief financial officer, and shares extended a 21% slide from the past month.
Comfort Systems USA, a mechanical and electrical contractor whose work includes data centers, reported a quarter that was strong on almost every measure.
Revenue rose 54% to $3.77 billion, well above the $3.39 billion analysts expected, according to Investing.com. Net income climbed to $489 million, or $13.91 a share, from $291.6 million, or $8.25, a year earlier, beating the $12.81 consensus. Operating cash flow nearly doubled to $1.01 billion.
The standout was backlog, the value of work under contract but not yet performed. It reached a record $17.81 billion, up 27% from $14.06 billion at the end of June and 90% from $9.38 billion a year earlier.
More than a year of work booked
At the third quarter's revenue pace, that backlog equals more than a year of work, roughly 14 months. A backlog growing faster than revenue means orders are arriving faster than the company can convert them into sales, which gives unusual visibility for a contractor.
Comfort Systems did not provide forward guidance. It also announced that Julie Shaeff will become chief financial officer next year, which the company described as a planned internal succession.
Why the shares fell
The stock dropped 8.7% to $1,279.37 during Thursday's regular session, before the report, and fell another 6.2% after hours. It has fallen about 21% over the past month.
The regular-session drop came on a day when stocks linked to AI infrastructure were sold heavily, from chipmakers to power producers. That points to sector sentiment rather than the report. The after-hours decline is harder to explain. One reading is that investors wanted a forecast to anchor the backlog, and the CFO change added uncertainty. Another is that the numbers were not the issue at all and that investors are reducing exposure to the data-center construction trade.
What to watch
Commentary from peers such as EMCOR and Quanta Services on data-center demand, and whether Comfort Systems converts backlog into revenue at its recent pace.