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Granite Wins $45.8M Contract

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Granite Construction Incorporated (GVA) has received a design-build contract worth $45.8 million from the Florida Department of Transportation. Construction work is scheduled to begin in Jan 2014 and the project is expected to be completed in 2016.

The project includes widening of eight miles of State Route I-75 in Pasco County, Florida. It also involves final design and construction work in the North of SR 52 along with expansion from four to six lanes.

The project work entails milling and resurfacing of the existing pavement, ramp improvements, miscellaneous structures and signing and pavement marking. Per the venture, Granite will install new storm water management facilities and flood plain compensation sites which will provide significant drainage improvements to the project site.

Granite expects to book both the projects into backlog during the fourth quarter of 2013. The development will bring intelligent transportation systems with geotechnical and environmental permission.

Granite, which belongs to the building and heavy construction industry, along with Chicago Bridge & Iron Company N.V. (CBI) and China Railway Construction Corporation Limited (CWYCY), reported earnings of $11 million or 28 cents per share in the third quarter of 2013 compared with $37.1 million or 94 cents a share in the prior-year quarter. The result also lagged the Zacks Consensus Estimate of 78 cents.

However, Granite recorded a backlog of $2.8 billion as of Sep 30, 2013, which increased around twofold year over year. The rise was driven by significant and large project awards. Granite continues to be benefited by the quality of backlog.

On an adjusted basis, Granite expects to report a small loss to break-even results in the fourth quarter of 2013. For full-year 2013, Granite revised the construction segment’s revenue forecast to the range of $1.2–$1.3 billion.

Watsonville, Calif.-based Granite is one of the largest infrastructure contractors and construction materials producers. Granite’s project teams represent some of the best in the industry serving owners in the transportation, power, federal, tunneling, underground, and industrial, mining and water resources markets, which serve both public- and private-sector clients.

Granite currently holds a Zacks Rank #5 (Strong Sell). A better-ranked stock in the same industry is Jiangsu Expressway Co. Ltd. (JEXYY), carrying a Zacks Rank #2 (Buy).

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