Rockford Corporation, a unit of the West Construction Services
Primoris Services Corporation
) has secured a new underground contract worth over $80 million for
three major midstream operators.
The contract work comprises a mixture of well hookups. The well
hookups join the wellhead to the processing equipment which is used
to separate oil and gas before it goes into the tank batteries or
through the meters run to the midstream companies.
The project also involves the installation of 42 miles of natural
gas and natural gas liquids pipelines for the midstream operators
that are located in the Marcellus Shale regions of Pennsylvania and
West Virginia. The construction work starts immediately and is
scheduled to be completed in this year.
Though it is common for Primoris to win contracts, the last two
months were especially opportune for the company as it won major
underground contracts during the period. On May 21, ARB Inc., a
unit of the West Construction Services segment of Primoris secured
a new underground contract from a major utility customer worth $200
million. The deal covers pipeline safety and replacement work in
Further on Jun 2, Sprint Pipeline Services, a unit of the East
Construction Services segment of Primoris secured an underground
contract from an important midstream oil and gas customer worth $10
million. The deal covers pipeline installation work in Texas.
Primoris' West Construction Services segment recorded a sales
increment of 12.7% year over year in the first-quarter of 2014. The
segment's gross profit increased 10% year over year to $31.7
million. During the next four quarters, Primoris is expected to
realize revenues of around 98% of the West Construction Services
The company's strong balance sheet will provide the flexibility for
continuous investment in external and internal opportunities. In
addition, various tailwinds such as the aging pipeline system, oil
and natural gas pricing differentials and environmental regulations
will drive demand in Primoris' end-markets providing growth
opportunities both in the near and mid-term.
Dallas, TX-based Primoris is a specialty contractor and
infrastructure company that serves diverse-end markets. The company
also provides a wide range of construction, fabrication,
maintenance, replacement, water and wastewater as well as
engineering services to major public utilities, petrochemical
companies, energy companies, municipalities and other customers.
At present, Primoris has a Zacks Rank #4 (Sell). Some better-ranked
stocks in the building and heavy construction industry include
Simpson Manufacturing Co., Inc.
Quanex Building Products Corp.
United Rentals, Inc.
). While Simpson Manufacturing sports a Zacks Rank #1 (Strong Buy),
Quanex Building and United Rentals carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
PRIMORIS SERVCS (PRIM): Free Stock Analysis
QUANEX BLDG PRD (NX): Free Stock Analysis
UTD RENTALS INC (URI): Free Stock Analysis
SIMPSON MFG INC (SSD): Free Stock Analysis
To read this article on Zacks.com click here.