Energy Services of America Corporation

What they do

Energy Services constructs, replaces and repairs natural gas pipelines and storage facilities for utility and private gas companies, with an emphasis on intrastate pipelines. It also builds liquid pipelines, pump stations and production facilities for the oil industry, and provides electrical, mechanical and general contracting work including substation and switchyard services for power, chemical, automotive and industrial customers. Operations run through C.J. Hughes and its subsidiaries, including Nitro Construction Services, Nitro Electric, Pinnacle and Contractors Rental, plus West Virginia Pipeline, SQP, Tri-State Paving, Ryan Construction and Tribute. Work is concentrated in West Virginia, Virginia, Ohio, Pennsylvania and Kentucky, with additional work in states including Alabama, Michigan, Illinois, Tennessee, North Carolina and Indiana.

Revenue drivers

• Electrical, Mechanical & General — Largest line at $196.8 million, or 47.9% of fiscal 2025 revenue, up 4.5% year over year on increased mechanical and electrical maintenance plus new construction; includes substation, switchyard, pipe fabrication and site preparation work.
• Gas & Water Distribution — $149.6 million, or 36.4% of fiscal 2025 revenue, up 81.5% from $82.4 million as the company pushed into more water project opportunities.
• Gas & Petroleum Transmission — $64.6 million, or 15.7% of fiscal 2025 revenue, down 20.3% from $81.1 million because of later bid opportunities and fewer natural gas project awards.

Recent performance

For the quarter ended June 30, 2026, revenue rose 25.5% to $130.0 million from $103.6 million, with growth across all segments led by Gas & Petroleum Transmission. Gross profit was $14.3 million versus $12.0 million, but gross margin slipped to 11.0% from 11.6% on one large gas transmission project. Net income was $3.3 million, or $0.18 per diluted share, up from $2.1 million, or $0.12. Selling and administrative expenses rose to $9.7 million from $8.8 million on higher labor costs tied to growth. Backlog was $286.6 million at June 30, 2026, versus $325.1 million at March 31, 2026 and $280.7 million a year earlier.

Strategy

The company is pursuing water infrastructure replacement and electrical construction demand, and cites growth in electric demand and data center build-out. It remains acquisition-oriented: it bought Rigney Digital Systems assets on September 30, 2025 and Tribute Contracting & Consultants assets on December 2, 2024, after Tri-State Paving and Ryan Construction in fiscal 2022. It sold residential solar subsidiary Revolt Energy on March 1, 2025 for nominal consideration. It also added horizontal directional drilling, civil, general contracting, broadband and solar installation capabilities. On August 10, 2026 it raised the quarterly dividend 33% to $0.04 per share.

Risks

• Quarter-to-quarter variability — Energy Services says it typically sees lower volumes and margins in winter and cites weather, revenue mix, labor shortages and construction cost inflation as swing factors.
• Gas transmission weakness — Gas & Petroleum Transmission revenue fell 20.3% in fiscal 2025 and a single large gas project cut the June 2026 quarter gross margin to 11.0%.
• Customer concentration and payment risk — Revenue comes from a named set of large utilities and industrials such as TransCanada, NiSource, Marathon Petroleum and American Electric Power, and management lists customer financial condition as a risk.
• Acquisition integration — The company has completed several acquisitions including Rigney Digital Systems and Tribute, and warns future deals could disrupt the business and hurt results.

Outlook

Management said the third quarter reflected strength across each segment, continued demand for water distribution and electrical construction, and a continued recovery in gas transmission, helped by favorable spring weather. President Doug Reynolds said profitability was slightly affected by a lower-than-expected gross margin on one large gas transmission project but the business mix absorbed it. He said the company remains optimistic about near- and longer-term opportunities from water infrastructure replacement and growth in electric demand and data centers.