Leading heavy civil marine contractor, Orion Marine Group Inc. (ORN) received a contract worth $68 million from the Port of Houston Authority. The scope of the contract is to deepen and widen the navigation channels and berthing areas for the Barbour's Cut and the Bayport container terminals along the Houston Ship Channel. The tenure of the contract is approximately 15 months, commencing from the third quarter of 2014.
In addition, Orion will be executing levee work along with maintenance dredging in the channels and turning basins. Over the last five months, Orion has received orders worth approximately $107 million (including the current $68 million). This includes two orders received by the company in Jan 2014 worth $19 million and $20 million, from a private Caribbean customer and a private client in the Gulf Coast region, respectively.
Orion is believed to have one of the most advanced dredging equipment in the industry. The company is one of the leading providers of a broad range of marine construction and contracting services. Some of the company’s main customers include the U.S. Marine Transportation System and the cruise industry.
In first-quarter 2014, the company reported net loss of 1 cent a share, narrower than the Zacks Consensus Estimate of a loss of 5 cents a share. However, during the quarter, contract revenues increased 8.3% to $81.3 million compared with $75.1 million in the prior-year quarter. The company expects to face underutilization of its dredging assets in the first half of the year, nevertheless, it expects demand from the private sector to drive equipment utilization and bid opportunities.
Orion currently has a Zacks Rank #3 (Hold). Some better ranked stocks in the sector include Emcor Group Inc. (EME), Sterling Construction Co. Inc. (STRL) and Tutor Perini Corporation (TPC). All three carry a Zacks Rank #2 (Buy).