Granite Construction Incorporated
) will book $31 million in the second quarter backlog pertaining to
its 41% share in the $75 million bridge reconstruction and widening
contract win. The contract was awarded by the Illinois Tollway to a
joint-venture between Granite Construction's subsidiary, Kenny
Construction Company and Edward Kraemer & Sons Inc.
The scope of the project entails construction of two new bridge
structures. This will increase capacity of the Fox River Bridge
from 6 lanes to 8 lanes with full shoulders to accommodate the new,
wider Interstate 90 roadway. The bridge structures will be
1,315-feet long and stand 40-feet above the surface of the Fox
River and have 8 spans supported by 7 piers, lower than the
existing 14 piers. The lesser number of piers will help reduce the
environmental impact on the waterway and forested fen underneath.
The project will commence from June 2014 and is slated to be
completed by the end of 2016. During the project tenure, the bridge
will remain open with three lanes in each direction being
maintained during peak hours.
Earlier this month, Granite Construction was awarded a $48 million
runway rehabilitation contract by the Alaska Department of
Transportation and Public Facilities. On Apr 30, Granite
Construction reported adjusted first-quarter loss per share of 49
cents improving from the year-ago quarter's loss per share of 57
The company's net sales nudged up 0.3% year over year to $380
million as increase in Large Project Construction and Construction
Material sales were offset by declines in the Construction and Real
Estate segments. Total contract backlog increased to $2.6 billion
as of Mar 31, 2014 from $2.5 billion as of Dec 31, 2013 and $2.4
billion as of Mar 31, 2013.
For 2014, Granite Construction expects revenues in the range of
$2.4 billion to $2.8 billion. Gross profit is expected to improve
significantly over the 2013 level. Consolidated EBITDA margin is
projected in the range of 5% to 7%.
Granite Construction's backlog, project funding and financing have
improved and private constructions are also showing signs of
growth. Furthermore, underground diversification opportunities in
power and tunnel position the company for growth.
The backlog at quarter end reflects a diverse, healthy portfolio
of projects which bodes well for the company. Both the Construction
and Large Project Construction segments are expected to gain
momentum starting second quarter with Large Project recognition
later in the year, driving overall performance in 2014.
Watsonville, CA-based Granite Construction is a leading
infrastructure contractor and construction materials producing
company. Its project teams are the best in the industry, serving
both public and private-sector clients in transportation, power,
federal, tunneling, underground, industrial/mining and water
Granite Construction currently carries a short-term Zacks Rank #3
(Hold). Some better-ranked stocks in the building and heavy
construction industry worth considering are
EMCOR Group Inc
Sterling Construction Co. Inc.
Tutor Perini Corp.
). All of these carry a Zacks Rank #2 (Buy).
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