Great Lakes Dredge & Dock Corporation GLDD has received $51.1-million multiple dredging contracts for the protection and maintenance of coastlines.
The first contract is CPRA Cameron Meadows Marsh Creation Project in Cameron Meadows, LA, which includes the creation of a new marsh area using material dredged from a borrow source offshore in the Gulf of Mexico. The contract work will begin in fourth-quarter 2020.
The second project named Oak Island Beach Project is based in North Carolina and will commence in fourth-quarter 2020. The work includes placement of beach fill material from the Jay Bird Shoals borrow area and dune grass planting on restore berms areas.
Another contract, which is projected to start operations in July 2020, is a New York and New Jersey Harbor, Port Jersey Channel Maintenance Dredging Federal Navigation Project. The scope of work includes maintenance dredging of shoaled material with offshore disposal at the Historic Area Remediation Site or HARS. The location is approximately 5 miles east of Sandy Hook, NJ.
The last contract is a Jacksonville Harbor Maintenance Dredging Project in Florida and includes channel maintenance dredging in various locations within the Lower Terminal Channel of Jacksonville Harbor. Work on this project is expected to be completed by the end of September.
U.S. Dredging Operation Bodes Well
Great Lakes — which shares space with MasTec, Inc. MTZ, North American Construction Group Ltd. NOA and EMCOR Group, Inc. EME in the same industry — is the largest provider of dredging services in the United States. The company’s revenues improved 13% year over year in first-quarter 2020. The upside was driven by strong production and project performance, given an increase in coastal protection and maintenance dredging revenues.
Although first-quarter backlog fell from the year-ago period as bidding activity was lower than the prior year, it sees additional phases of multiple large deepening and other capital projects to bid in the upcoming quarters, including extension of Charleston, Jacksonville and Corpus Christi deepenings, as well new deepenings for ports in Mobile, Alabama and the Everglades in Florida.
Shares of this Zacks Rank #3 (Hold) company have outperformed the industry so far this year. The price performance was mainly driven by solid project execution strategy and strong year-over-year performance. This trend is expected to continue in the current year as well. The Zacks Consensus Estimate for 2020 earnings is currently pegged at $1.06, indicating a 23.3% year-over-year improvement.
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