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Sterling Affiliate Low Bidder for CalTrans

Zacks Equity Research

Myers & Sons Construction, L.P., an affiliate of Sterling Construction Company, Inc. (STRL), has been declared a low bidder on the California Department of Transportation (CalTrans) project. The company bid around $29.7 million for the U.S. 50/Silva Valley project.

The Silva Valley project in El Dorado County includes the construction of bridge overcrossing, auxiliary lanes, on and off ramps and new facilities for bicycle and pedestrians.

Sterling will build three box girder bridges and one flat slab bridge. The project is expected to be completed in two years. It is aimed at decreasing congestion and improving travel time by providing direct access to U.S. Highway 50 for adjacent residents and businesses.

Sterling, which belongs to the building and heavy construction industry along with Chicago Bridge & Iron Co. N.V. (CBI) and China Railway Construction Corp. (CWYCY), posted an adjusted loss of 93 cents per share in second-quarter 2013 compared with the prior-year earnings of 15 cents a share. The loss per share was narrower than the Zacks Consensus Estimate of a loss per share of $1.10.

Sterling booked new contracts aggregating about $154 million during the second quarter. The company also recorded a backlog of $714 million as of Jun 30, 2013, compared with $656 million as of Dec 31, 2012.

Revenues are forecast to remain flat or slightly down for the second half of 2013 compared to the second half of 2012. The company also expects improvement in bookings, both in terms of comparable quarter growth and profitability. General and administrative expense will remain higher due to the ongoing investments in integration and future growth.

Houston, TX-based Sterling is a leading heavy civil construction company engaged in the building and reconstruction of transportation and water infrastructure projects in its home state, Utah, Nevada, Arizona, California and other states. Its transportation infrastructure projects include highways, roads, bridges and light rail. Its water infrastructure projects constitute water, wastewater and storm drainage systems.

Sterling currently retains a Zacks Rank #4 (Sell). However, not all stocks in the same industry are performing as poorly as Sterling. For instance, Hopewell Highway Infrastructure Ltd (HHILY) holds value with a Zacks Rank #2 (Buy).

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