Shares of Sterling Infrastructure (STRL) jumped approximately 19% in late trading Monday, after the company reported first-quarter earnings and revenue that exceeded analyst expectations, fueled by robust demand from data center and semiconductor projects. The stock last traded at $631.05, up from a close of $529.49.
Strong Quarterly Results
For the quarter ended March 31, Sterling posted net income attributable to common stockholders of $96.0 million, or $3.09 per diluted share. Revenue surged 92% to $825.7 million, which included $156.1 million from the recently acquired CEC business. Adjusted earnings came in at $3.59 per share, well above the $2.29 consensus estimate from analysts surveyed by Zacks. Revenue also surpassed the $585.4 million forecast.
Data Center and Semiconductor Demand Fuel Growth
The company's E-Infrastructure segment led the charge, with revenue skyrocketing 174% to $597.7 million, accounting for 72% of total revenue. Mission-critical projects, including data centers, factories, and chip plants, represented over 90% of the E-Infrastructure backlog at quarter-end. CEO Joe Cutillo described the quarter as an "exceptional start," noting that bid and award momentum in early 2026 had boosted visibility. Sterling secured the initial phase of site development for a major multi-year semiconductor fabrication campus, and CEC landed multiple large contracts, contributing $1.2 billion to the combined backlog.
Backlog and Outlook
Backlog climbed to $3.80 billion, up 78% year-over-year. Including unsigned awards, combined backlog surged 131% to $5.15 billion. The company raised its 2026 revenue target to a range of $3.70 billion to $3.80 billion, with adjusted diluted EPS projected between $18.40 and $19.05. Adjusted EBITDA is expected to land between $843 million and $873 million.
Mixed Performance Across Segments
Transportation Solutions posted a 10% revenue gain, while Building Solutions edged up 3%. However, Building Solutions saw adjusted operating income plunge 42%, with Cutillo citing ongoing housing affordability issues and "soft market conditions" that could persist. Management cautioned that the outlook depends on assumptions such as smooth CEC integration and project delivery, with market conditions still uncertain.
Financial Position and Market Context
Sterling generated $165.6 million in operating cash flow and ended the quarter with $511.9 million in cash and equivalents. Share buybacks totaled $12.3 million. Net cash stood at $224 million as of March 31. Investors are closely watching construction and electrical infrastructure stocks tied to data-center growth. In March, Primoris Services announced plans to acquire PayneCrest Electric for $422 million, boosting its data-center presence. Everus Construction Group is expected to report first-quarter numbers on May 5.
Upcoming Investor Call
Management will host a conference call with investors on Tuesday at 9 a.m. ET. Key topics likely include timeline specifics, the size of CEC's role, and how much of the backlog can realistically boost margins.