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Great Lakes Inks Contract for Trailing Suction Hopper Dredge

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Zacks Equity Research
·3 min read
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Great Lakes Dredge & Dock Corporation GLDD has received a contract for the construction of a 6,500-cubic-yard-capacity trailing suction hopper dredge. This highly-automated new build vessel will boost the capabilities of the company’s hopper fleet in coastal protection and maintenance markets. It will also address specific needs in the growing offshore wind market.

Lasse Petterson, Great Lakes’ chief executive officer and president said, “As the leader in the US Dredging industry, Great Lakes continues to strategically invest in its dredging fleet.”

This vessel — which is expected to be delivered in first-quarter 2023 — will complement the company’s existing six-dredge Hopper fleet, including the ATB Tug Douglas B. Mackie and 15,000-cubic-yard-capacity barge Ellis Island.

At peak construction level, this Jones Act qualified vessel will create 150 high-paying shipyard jobs and upon delivery, the ship will be crewed by U.S. citizen mariners.

It has contracted with Conrad Shipyard of Morgan City, LA for the new vessel construction, with an option of building an additional dredge, if market conditions warrant.

Great Lakes’ Strong Project Execution a Boon

Shares of the company have advanced 27.7% over the past three months, outperforming the Zacks Building Products - Heavy Construction industry’s 25.4% growth. The uptrend is likely to continue in the near term owing to solid backlog and cost-reduction program. Earnings estimates for 2020 have gained 23.3% over the past 60 days, indicating a year-over-year growth rate of 23.3%. The company has been benefiting from strong production and project performance, along with an increase in coastal protection and maintenance dredging revenues. This largest provider of dredging services in the United States has a strong record of earnings surprises, having surpassed the Zacks Consensus Estimate in the trailing nine quarters.


As a federally-designated “Critical Infrastructure” company, Great Lakes remained operational during the pandemic, ensuring the safety of all team members. During the first quarter, the company delivered an exceptional performance buoyed by strong project performance. Net income from continuing operations was $34 million (up 65.9% year over year) and adjusted EBITDA from continuing operations was $61.4 million (up 39.9%). Meanwhile, a high activity level and solid backlog ($474.9 million as of Mar 31, 2020) are likely to boost its quarterly revenues going forward.

Zacks Rank & Other Key Picks

Great Lakes currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the same space include Tutor Perini Corporation TPC, Dycom Industries Inc. DY and Orion Group Holdings Inc. ORN. While Tutor Perini sports a Zacks Rank #1, Dycom and Orion Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tutor Perini’s earnings for the current year are expected to increase 200%.

Dycom’s fiscal 2021 earnings are expected to increase 34.9%.

Orion Group’s 2021 earnings are expected to grow 41.7%.

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Orion Group Holdings, Inc. (ORN) : Free Stock Analysis Report
 
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Tutor Perini Corporation (TPC) : Free Stock Analysis Report
 
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