Primoris Subsidiary Wins $90M Pipeline Contract - Analyst Blog
Sprint Pipelines Services, a subsidiary of
Primoris Services Corporation
), has recently been awarded major contract awards from midstream
oil & gas companies to the tune of $90 million.
Among the contracts, the largest consists of a 95 mile pipeline with 20 inch diameter stretching from College Station, Texas, south to Houston, Texas. This pipeline is part of the BridgeTex Pipeline. This pipeline will transport 300,000 barrels crude oil on a daily basis between Colorado City and Texas City. Sprint's work will start in the fourth quarter of 2013 and is slated to be completed in the second quarter of 2014.
The scope of the second contract consists of a 4.5 miles of pipeline, 20 inch and 24 inch in diameter, to transport oil between storage and processing facilities. This is located near Galena Park, Texas. Work has started in the third quarter of 2013 and will be completed in the first quarter of 2014.
Pearland, Texas-based Sprint came under Primoris' wing in Mar 2012. Sprint provides a comprehensive range of pipeline construction, maintenance, upgrade, fabrication and specialty services primarily in the southeastern United States. Sprint is included in Prmioris' East Construction Services segment.
Primoris has been winning contracts on a regular basis. In September, the company won contracts worth $155 million covering pipeline and highway infrastructure projects throughout the continental U.S. and followed it with a major construction contract win worth $100 million for two of its industrial facilities in south Louisiana in early Oct.
Primoris, which belongs to the building and heavy construction industry along with Chicago Bridge & Iron Company N.V. ( CBI ), reported second-quarter 2013 earnings of 30 cents per share, up 30% from 23 cents in the year-ago quarter. Primoris' East Construction Services segment recorded sales of $175 million in second-quarter 2013, up 12% from the year-ago quarter, led by the acquisitions of Saxon and FSSI (Force Specialty Services Inc). Enhanced activity at Sprint and increased water facility treatment work in Florida and Texas also aided the growth, partly offset by a decline in the JCG Heavy Civil and Infrastructure & Maintenance divisions.
Primoris exited the quarter with a total backlog of $1.38 billion. Backlog in the East Construction Services segment stood at $999 million. Over the next four quarters, Primoris will recognize revenues of around 45% of the East Construction Services segment backlog, about 97% of the West Construction Services segment backlog and 100% of the Engineering segment backlog. This, in addition to the new contract wins, will boost the top line.
There remain ample prospects for continued growth across Primoris' end markets. Improvement in the U.S. energy infrastructure will drive growth. In addition, the industrial and water end markets are poised for significant growth in the coming years.
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 retains a Zacks Rank #4 (Sell). Other stocks in the industry with favorable Zacks ranks are Empresas ICA, S.A.B. de C.V. ( ICA ) and Hopewell Highway Infrastructure Ltd ( HHILY ). Both hold a Zacks Rank #2 (Buy).
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