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Primoris Unit Wins $100M Contract

Zacks Equity Research

James Construction Group, a unit of Primoris Services Corporation (PRIM), has secured a major construction contract worth $100 million for two of its industrial facilities in south Louisiana.

Acquired in 2009, James Construction Group is a unit of the East Construction Services segment of Primoris. Its Industrial and Infrastructure groups secured the contract to build new nitrogen and ammonia plants. The project also includes relocation and formation of a methane reformer. The construction will be completed by the end of next year.

Primoris, which belongs to the building and heavy construction industry along with Chicago Bridge & Iron Company N.V. (CBI), recently secured new contracts worth $155 million. The deals cover pipeline and highway infrastructure projects throughout the continental U.S.

Primoris’ East Construction Services segment recorded sales of $175 million in second-quarter 2013, up 12% from the year-ago quarter, led by the acquisitions of Saxon and FSSI (Force Specialty Services Inc). Enhanced activity at Sprint and increased water facility treatment work in Florida and Texas also drivers of growth, partly offset by a decline in the JCG Heavy Civil and Infrastructure & Maintenance divisions.

Over the next four quarters, Primoris will recognize revenues of around 50% of the East Construction Services segment backlog, about 98% of the West Construction Services segment backlog and 100% of the Engineering segment backlog.

Dallas, TX-based Primoris is a specialty contractor and infrastructure company which serves diverse end markets. The company also provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers.

Primoris currently retains a Zacks Rank #3 (Hold).

Other stocks in the building and heavy construction industry with favorable Zacks rank are Empresas ICA, S.A.B. de C.V. (ICA) and Hopewell Highway Infrastructure Ltd (HHILY). Both hold a Zacks Rank #2 (Buy).

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