CEO prods Congress to act on infrastructure funding bill
WATSONVILLE — After a several-year slowdown, Granite Construction reported a slight uptick in first quarter revenues compared to a year ago, but the company still reported a greater-than-expected loss for the quarter.
The company said the private market is picking up steam and forecast a revenue bump in the second half of the year as several major projects underway reach certain goals and will be included in the overall financials.
“As we enter the 2014 building season, I’m pleased to say that our plan remains on track,” said James H. Roberts, president and CEO of the publicly owned major civil contractor. Roberts said that despite “slower-than-anticipated recovery and growth in some Western markets, the company expected revenue growth across the company.
On a conference call with analysts and investors Wednesday, Roberts said the company has a “strong backlog” and is experiencing a “healthy bidding environment” that is driving opportunities in large projects.
“We are laser-focused on first driving results through improved execution on our existing healthy book of backlog across both our construction and large project construction segments,” Roberts said.
The company has also made progress in its recent forays into new industries such as the power-related construction market and is seeing the highest backlog in its construction materials business in recent years.
More private work is a positive offset to public project slowdowns, Roberts said.
“It remains too soon to say we have reached an inflection point, but we are encouraged by the performance in this part of our business,” Roberts added, referring to the backlog growth in its construction materials business.
Roberts warned, however, that legislative delays in securing federal funding and loan support for transportation and other infrastructure projects are contributing to an unstable bidding environment.
“The continued inaction by Congress to address our country’s infrastructure needs has reached a critical juncture,” Roberts said. “Congress must act now and act decisively to adequately fund America’s infrastructure. Without this investment it could quickly erase the early signs of recovery that we are finally experiencing.”
Earlier in the month, the company announced it was selected on a $2.32 billion joint venture project in Florida to build 21 miles of highway with tolled express lanes. Granite’s portion amounts to nearly $700 million and will be included in the company’s backlog once the deal is finalized.
Granite also celebrated its inclusion with 143 other companies on Ethisphere Institute’s “World’s Most Ethical” companies for a fifth consecutive year. Two other construction companies made the list this year, CRH plc of Ireland and IHCC (International Hospitals Construction Co.) of Saudi Arabia.
Granite Construction Inc.
WHAT: Granite Construction Inc. is the holding company for Granite Construction Co., Granite Construction Northeast Inc., and Kenny Construction. The heavy civil construction contractor in the U.S. operates in 25 states, serving both public and private sector clients in the transportation, power, federal, tunneling, underground, industrial/mining and water resources markets.
HEADQUARTERS: 585 W. Beach St., Watsonville.
BACKGROUND: Founded in 1922, the company incorporated in 1990.
LEADERSHIP: James H. Roberts, chief executive officer and president.
EMPLOYEES: The company employs about 1,600 salaried, plus about 3,500 hourly employees, a number that fluctuates seasonally.
INFORMATION: 831-724-1011; www.graniteconstruction.com
STOCK PRICE: Wednesday, GVA shares were up 8 cents to close at $37.38. In the last year, shares have traded from $26.07 to $40.55.
FINANCIALS: Revenue for the first quarter of 2014 was $379.85 million compared with $378.70 million a year ago in the same quarter. Net loss for the quarter was ($21.26 million) or a loss of (53 cents) earnings per diluted share, compared to $ 19.83 million, or 57 cents earnings per diluted share, in the first quarter 2013. The company had nearly $205.8 million in cash and cash equivalents.
GUIDANCE: The company expects 2014 revenues of $2.4 billion to $2.8 billion with gross profit to “significantly” improve over that of 2013.