WATSONVILLE—Despite a tough winter in the Northeast, Granite Construction celebrated a 10.6 percent jump in revenues and a smaller year-over-year loss. It was the company’s strongest financial quarter since 2009, executives said.
“This quarter I am particularly encouraged that we grew revenue and margins across all segments,” said James Roberts, CEO and president. It was the fourth consecutive quarter of margin growth. It “reflects solid execution.” Roberts also credited a better economy and mild weather in the west. “A good start to the year, coupled with solid project execution, bodes well for improved results in 2015.”
Company shares shot up more than 7 percent during the day to close at $36.62.
Total first quarter revenue was $420.25 million. Net loss for the quarter was $4.51 million, or a loss of 22 cents earnings per diluted share. The company has a backlog of projects valued at $2.9 billion, most of which are large government contracts.
It would, however, have been a much rosier picture if Congress had voted on a long-awaited long-term federal transportation bill. Although Roberts had predicted it would happen this year, he told analysts on Tuesday that his optimism was waning.
The two-year federal highway bill, Moving Ahead for Progress in the 21st Century, expired in September and a short-term extension runs out at the end of the month. Short-term patches that include borrowing from the federal general fund are expected through the fiscal year, Roberts said. States are trying to make up funding gaps through bonds, gas taxes and fee increases, but it’s not enough, he said.
“We believe that a rational, national approach to infrastructure investment in our country is critical to the broader success of the U.S. economy and stronger economic growth,” Roberts said. “Unfortunately, according to the U.S. Department of Transportation, uncertainty over federal funding already has moved a number of states to delay construction on transportation projects.”
Leading the company’s good news was progress in aggregate materials sales, which increased 16.8 percent to $41.4 million and is an indicator of overall market activity, backlog and good weather, Roberts said. It was the first time the segment had been profitable in the first quarter since 2008.
Private contracts have also picked up. They made up just about 5 percent of the company’s overall revenue a few years ago, but have jumped to more than 20 percent in the first quarter.
Revenue in the company’s construction division climbed 20 percent year-over-year; and large project division saw an increase of 1.6 percent.
In other company news, Granite celebrated its sixth year named one of 2015 World’s Most Ethical Company by the Ethisphere Institute.
The company will be meeting in Monterey on June 4 for its annual shareholder meeting.
WHAT: Granite Construction Inc. is a national civil contractor and construction materials producer, specializing in complex infrastructure projects, including transportation, industrial and federal contracting.
HEADQUARTERS: 585 W. Beach St., Watsonville.
HISTORY: Founded in 1922, the company incorporated in 1990.
HEADCOUNT: As of Dec. 31, the company employed about 1,700 salaried, plus about 1,300 hourly employees.
INFORMATION: 831-724-1011; http://www.graniteconstruction.com
STOCK PRICE: GVA shares were up $2.45 Monday to close at $36.62. In the last year, shares have traded from $30.44 to $39.09.
FINANCIALS: First quarter revenue was $420.25 million, compared with $379.85 million a year ago in the same quarter. Net loss for the quarter was $4.51 million, or a loss of 22 cents earnings per diluted share, compared to a loss a year ago of $8.06 million, or a loss of 53 cents earnings per diluted share, in the first quarter 2014.
The company reported about $239.4 million in cash and cash equivalents. The company backlog of projects climbed to more than $2.94 billion.
GUIDANCE: The company forecast mid-single digit consolidated revenue growth for 2015.