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Primoris' Unit Wins 3-year Contract

Zacks Equity Research

Q3 Contracting, a unit of the West Construction Services segment of Primoris Services Corporation (PRIM) has secured a new three year contract from Xcel Energy. The contract covers gas distribution work in the Denver area. The work, under the contract, will begin immediately.

The contract will result in a net revenue increase of over $80 million over the next three year period and includes an option for an additional two years. The contract will significantly raise the level of the work.

Primoris, which belongs to the building and heavy construction industry along with Chicago Bridge & Iron Company N.V. (CBI), Orion Marine Group, Inc (ORN) and Dycom Industries Inc. (DY), reported revenues of $410 million in first-quarter 2013, up around 41% year over year. The results were ahead of the Zacks Consensus Estimate of $351 million. Roughly 19% of the rise was attributable to organic growth with the remaining 22% coming from the acquisitions of Sprint, Saxon, Q3C, and FSSI.

Primoris’ West Construction Services segment recorded sales of $207.7 million, up 31% from the year-ago quarter, led by increased revenues at Rockford, partly offset by a revenue decline in the ARB Industrial division.

For full-year 2013, Primoris expects substantial contributions from the recent acquisitions. The company remains optimistic about its business lines for the near term as well as the long term.

Dallas, Tex.-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 short-term Zacks Rank #1 (Strong Buy).

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