Primoris Services Corporation
) gained 9% since it reported third-quarter 2013 earnings on Nov
5. Earnings increased 23.5% year over year to 42 cents per share
from 34 cents benefiting from the company's expansion in
energy-focused markets. The results beat the Zacks Consensus
Estimate by a penny.
Revenues in the quarter increased 28% year over year to $551
million. The results were ahead of the Zacks Consensus Estimate
of $507 million. The year-over-year rise was attributable to 10%
growth at legacy companies and the remaining 17.7% increase from
the acquisitions of Sprint, Saxon, Q3C, and FSSI.
Cost of sales rose 26% to $475.8 million from $375.5 million in
the year-ago quarter. Gross profit improved 34% year over year to
$75 million. Consequently, gross margin expanded 70 basis points
(bps) year over year to 13.7%.
Selling, general and administrative expenses climbed 40% year
over year to $36.5 million. Operating profit was $38.9 million,
up 28.7% from the prior-year quarter. However, operating margin
remained flat year over year at 7%.
East Construction Services:
Net sales decreased 1.4% year over year to $178.7 million. The
acquisitions of Saxon and FSSI contributed $14.4 million to
revenues. Revenue growth was also driven by improved activity at
JCG Industrial, Infrastructure & Maintenance divisions and
increased water facility treatment work in Florida and Texas,
partly offset by a decline in the JCG Heavy Civil division and
Sprint Pipeline. Gross profit however dropped 43% to $10.6
million from $18.6 million in the year-ago quarter.
West Construction Services:
Sales went up 49.7% year over year to $362 million. The Q3C
acquisition contributed $62 million to revenues. In addition,
increased revenues at Rockford and ARB Structures facilitated the
growth, partially offset by a revenue decline in the ARB
Underground and ARB Industrial divisions. The segment's gross
profit soared 75.6% year over year to $62.5 million.
Net sales rose 19.9% year over year to $10 million. Gross profit
also increased 15.8% year over year to $2.3 million.
As of Sep 30, 2013, cash and cash equivalents amounted to $174
million versus $157.5 million as of Dec 31, 2012. Long-term debt
was $188.7 million as of Sep 30, 2013, compared with $128.3
million as of Dec 31, 2012. The debt-to-capitalization ratio
expanded 530 bps to 36% as of Sep 30, 2013, from 30.7% as of Dec
Total backlog was $1.92 billion as of Sep 30, 2013 compared with
$1.35 billion as of Dec 31, 2012.
Primoris anticipates gains from continuous investment in
equipment fleet, because of its bullishness in current
end-markets. Strong balance sheet and potential acquisitions are
also expected to drive growth. In addition, the company predicts
that U.S. energy infrastructure is poised for significant
expansion in coming years.
The company remains optimistic about the petrochemical and
refining industry and expects to gain several more projects in
the near future. The Engineering segment will also develop based
on its growth trend in margin expansion in both domestic and
For full-year 2013, the company expects strong contributions from
recent acquisitions, as well as the legacy group. Water and
wastewater markets have also recovered this year, which is likely
to augment revenue growth.
Over the next four quarters, Primoris will recognize as revenues
around 63% of the East Construction Services segment backlog,
about 99% of the West Construction Services segment backlog and
91% of the Engineering segment backlog.
Primoris plans to continue booking new job awards in the Heavy
Civil division, specifically in Texas and Mississippi, which have
more than compensated for continued weakness in the Louisiana
Dallas, Texas-based Primoris is a specialty contractor and
infrastructure company which serves diverse end markets. The
company also provides a wide range of construction, fabrication,
maintenance, replacement, water and wastewater, and engineering
services to major public utilities, petrochemical companies,
energy companies, municipalities and other customers.
Primoris currently has a Zacks Rank #3 (Hold).
Jiangsu Expressway Co. Ltd.
) also belongs to the same industry and holds a Zacks Rank #2
Chicago Bridge & Iron Company N.V.
) reported third-quarter 2013 adjusted earnings of $121.3 million
or $1.12 per share (excluding one-time items), in line with
the Zacks Consensus Estimate. Adjusted net income improved 46.7%
year over year on the back of strong project activities during
Granite Construction Incorporated
) fell 70% year over year to $11 million or 28 cents per share in
third-quarter 2013, from $37.1 million or 94 cents, due to the
negative impact from a large highway project in Washington State.
The results lagged the Zacks Consensus Estimate of 78 cents.
CHICAGO BRIDGE (CBI): Free Stock Analysis
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