WATSONVILLE—Granite Construction hailed an uptick in the heavy construction sector Monday, citing steady growth in the third quarter that included net income that was more than double from last year and a record project backlog of $3.1 billion.
“All in all, our solid third quarter and steady year-to-date performance reflects continued recovery from a more than six-year industry slowdown,” said James Roberts, chief executive and president of Granite Construction.
On a conference call Monday with analysts and investors, Roberts said there are also positive signs that the House and Senate finally will pass a federal transportation bill by year-end. If it does happen, it will release billions of dollars of pent-up demand. Roberts said he expected states would begin putting some of their delayed projects out for bid soon.
“We are ready to repair our aging infrastructure,” he said.
The company, which bids on projects across the nation and in Guam, expects to bid $5 billion worth of projects by year-end and about $16 billion by the end of 2016.
International competition, which has in some cases aggressively undercut bids, has put some pressure on the process, but Granite will maintain its margins, Roberts said.
“Some of the pricing can make you shake your head, but that’s somebody else’s business,” he said. “For us, we’re going to stay disciplined and keep our pricing what it is.”
The company reported a 4.4 percent revenue increase from a year ago in the third quarter. The increase includes a 4.5 percent revenue decline in its construction segment, a 21 percent increase in the large project division and a 15.1 percent increase in the construction materials division.
“Certainly we’re not where we want to be or need to be yet, but we’re making great progress as we continue our recovery from recent trough levels,” said Laurel J. Krzeminski, chief financial officer. “Thankfully last year’s challenges are largely behind us.”
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.
BACKGROUND: Founded in 1922, the company incorporated in 1990.
LEADERSHIP: James H. Roberts, chief executive officer and president.
INFORMATION: 831-724-1011; www.graniteconstruction.com
STOCK PRICE: GVA shares increased $1.26 Monday to close at $34.10. In the last year, shares have traded between $28.45 and $39.09.
FINANCIALS: Third quarter revenue was $751.4 million compared to $719.8 million last year in the same quarter. Net income was $30.8 million, or 77 cents diluted earnings per share, compared to$15.3 million, or 38 cents per share a year ago. Granite reported having about $310 million in cash and marketable securities.
NEW LOAN AGREEMENT: The company also announced a new credit agreement increase that includes a $200 million revolving credit and a $100 million loan.
PROJECT BACKLOG: The value of the company’s project backlog is a record $3.1 billion.
GUIDANCE: The company maintained its forecast of mid-single digit consolidated revenue growth for the year.
This article appeared in the Santa Cruz Sentinel.