Orion (ORN) Wins $200M Contract, Fortifies Marine Segment
Orion Group Holdings, Inc. ORN announced that it has secured two contracts valuing nearly $200 million pertaining to the Marine segment
This leading specialty construction company has received a $125-million contract from the Florida Department of Transportation (FDOT) to substitute the State Road 405 Indian River Bridge over the NASA Causeway near Cape Canaveral, Florida. The project work is anticipated to start from the fourth quarter of 2021 and is expected to be finished during the fourth quarter of 2024.
Additionally, Orion has been awarded another $67-million contract by the Port of Port Arthur to build the Berth 6 Expansion Project in Port Arthur, TX. This construction will allow remarkable additional berthing capacity at the port. This project is also expected to start during the fourth quarter of 2021 and continue till the third quarter of 2024.
Concerning this, Orion's President and CEO, Mark Stauffer, said, “The NASA Causeway project marks our fourth bridge project to be awarded recently, and along with the Berth 6 Expansion, not only provides significant backlog to our Marine segment, but reaffirms Orion as a leading contractor for building and rebuilding our nation’s infrastructure.”
Contract Wins Aid Performance
Orion generates revenues from various marine construction, dredging, turnkey concrete services and other specialty services contracts. These projects are typically short duration and usually span for less than a year.
Of late, the company has won several contracts within the Marine and Concrete segments.
During September 2021, the company won three dredging services contracts within the Marine segment for a combined value of approximately $22 million. The U.S. Army Corps of Engineers (USACE) has awarded these contracts to maintain waterways along the gulf coast. Furthermore, during the same period, the company won several contracts within the Marine and Concrete segments for a combined value of approximately $61 million.
Shares of Orion have gained 86.2% over the past year compared with the Zacks Building Products - Heavy Construction industry’s 75.7% growth. The company is optimistic about its end markets and future project opportunities. During the second quarter of 2021, the company witnessed significant bids, including several large projects, and it ended the quarter with a substantial amount of quoted work outstanding.
Furthermore, Orion is optimistic about its end markets and emerging opportunities across the market, as evident from the $2 billion of quoted bids outstanding at quarter-end. Also, the federal infrastructure bill would provide an additional catalyst for the end markets and drive absorption of industry capacity.
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Zacks Rank & Key Picks
Currently, Orion carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the Zacks Construction sector include Meritage Homes Corporation MTH, KBR, Inc. KBR and MasTec, Inc. MTZ, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meritage Homes, KBR and MasTec’s earnings for 2021 are expected to rise 72.4%, 24.9%, 6.7%, respectively.
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