Comfort Systems Reports 3Q

Comfort Systems' FIX third-quarter results, released Thursday, showed strong operating leverage, but revealed the second consecutive quarterly decline in contract backlog. Revenue growth of 22% leveraged into a 30% increase in operating income, despite a 50-basis-point decline in gross margins. The mix shift toward larger heating, ventilation, and air conditioning (HVAC) projects, which spread overhead expenses across a larger revenue base, more than offset this weakness as operating margins swelled to 4.9%, up 30 basis points from the year-ago period.