Great Lakes Dredge & Dock Corporation
) announced that it has been awarded a $122 million contract for
deepening of the Miami Harbor by the U.S. Army Corps of
Engineers. With further options of contract expected to be
awarded by January 31, 2014, the project value will go up to $206
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Dredging on this project is slated to begin in the fourth
quarter. The project will deepen the Port of Miami channel to
minus 50 feet and will equip the port to accommodate the next
generation post-Panamax vessels that will transport cargo through
the expanded Panama Canal starting in early 2015.
The base work of the project includes excavation of the offshore
entrance channel to the Port. Further option work which is
expected to be awarded by January 31, 2014 involves the deepening
of the inner channels. This will provide access to the Port's
Great Lakes will employ over 300 crew and staff for the execution
of this project. The project will take place in the
environmentally sensitive waters of one of the busiest ports in
the United States. Thus, important aspects of the project include
seagrass and coral resource health monitoring and water quality
and sedimentation measurement activities. Great Lakes and other
environmental partners will be liable for safety of the public,
crews employed on the project, vessel traffic as well as the
marine environment. In order to excavate the hard limestone found
in Miami and other East Coast ports, Great Lakes will employ the
best-in-class heavy-duty rock cutter suction dredge.
Great Lakes reported earnings per share of 1 cent in the first
quarter of 2013, which stood at half the year-ago quarter's
earnings and fell short of the Zacks Consensus Estimate of 5
cents. Weak results at the demolition segment offset improved
performance in the dredging segment. Total backlog as of the
first quarter end stood at $417 million, down from $449 million
as of 2012 end.
After a record fourth quarter of 2012, the Dredging segment
delivered another strong quarter. This momentum is expected to
continue, going forward. Great Lakes' Australia and Brazil
projects will begin dredging in the second quarter. The domestic
dredging bid market continues to be active. Great Lakes has won
52% of the market in the first quarter and added a $30 million
coastal protection project in April. Numerous Superstorm Sandy
related projects are expected to continue. The State of Louisiana
recently announced $340 million of potential projects funded by
the initial BP settlement.
The demolition segment will, however, require some time to
deliver a turnaround. Great Lakes foresees numerous demolition
and environmental remediation opportunities on the horizon, and
plans to selectively target those projects that it can execute
Great Lakes Dredge & Dock Corporation is the largest provider
of dredging services in the United States. Great Lakes is also
one of the largest U.S. providers of commercial and industrial
demolition and remediation services, mainly in the Northeast.
Great Lakes currently holds a Zacks Rank #5 (Strong Sell).
Other stocks to consider in the same industry with a favorable
Zacks Rank are
Primoris Services Corporation
) with a Zacks Rank #1 (Strong Buy) while
Orion Marine Group Inc.
Chicago Bridge & Iron
) retain a Zacks Rank #2 (Buy).