Granite Construction Awarded $72M Contract by USACE
Granite Construction Incorporated GVA has been awarded a $72 million contract to build new outlet structures at the Addicks and Barker Dams in Houston, TX by the U.S. Army Corps of Engineers (USACE). The project will be booked into Granite Construction’s backlog during the third quarter of 2015.
Scope of the project includes construction of new intake towers, steel-lined conduits, parabolic chute slabs, stilling basins, cutoff walls and downstream filters, in addition to the grouting and decommissioning of the existing outlet structures in place at both dams. There will also be an additional seepage cutoff wall at Barker Dam.
Construction is slated to begin in the fourth quarter of 2015. On completion of construction of the new structures, the temporary cofferdams will be removed and the site restored. Completion of the project is scheduled for May 2019.
Granite Construction’s second-quarter earnings per share declined 31% year over year to 24 cents. The bottom line also missed the Zacks Consensus Estimate of 42 cents by a wide margin of 43%. Total contract backlog increased 17% year over year to $3 billion in the reported quarter.
Granite Construction retained its 2015 guidance and expects consolidated revenue growth in the mid-single digits and consolidated EBITDA margin of 6% to 8%.
Granite Construction is poised to benefit from modest economic improvement. The company remains focused on opportunities to leverage pent-up demand as the funding environment is progressing. While Congress is holding up long-term highway bill, the company is actively ramping up the execution of its strategic plan based on its optimism on the bill.
Granite Construction’s sound backlog and several additional awards bode well for its future performance. A new long-term highway bill is essential to ensure longer-term funding that can meet the increasing demand for critical infrastructure projects across the country.
Watsonville, CA-based Granite Construction is a leading infrastructure contractor and construction materials producing company. Its project teams represent the best in the industry; serving both public and private-sector clients in transportation, power, federal, tunneling, underground, industrial/mining and water resources markets.
Granite Construction currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include China Railway Construction Corporation Limited CWYCY, China Railway Group Limited CRWOY and Dycom Industries Inc. DY. All these stocks carry a Zacks Rank #1 (Strong Buy).
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