IES Holdings, Inc. (NASDAQ: IESC) stock plummeted 5.12% in pre-market trading on Friday, despite reporting strong overall third-quarter results. The electrical systems company's performance was marred by challenges in its Residential segment, overshadowing growth in other areas.

For the fiscal third quarter of 2025, IES Holdings reported revenue of $890 million, up 16% year-over-year, and adjusted earnings per share of $3.95, beating analyst expectations. However, the company's Residential segment saw an 8% decline in revenue and a significant drop in operating income due to softness in the housing market.

While the Communications, Infrastructure Solutions, and Commercial & Industrial segments showed robust growth driven by strong demand in the data center market, investors appear concerned about the ongoing challenges in the Residential business. The company cited consumer demand being affected by housing affordability issues, insurance availability, unemployment, and overall economic uncertainty as factors impacting this segment's performance.