Primoris Services Corporation PRIM announced significant contract awards worth approximately $1.2 billion, bolstering its Energy Segment. The contracts include nearly $700 million secured in second-quarter 2024 and more than $500 million booked early for the third quarter of 2024.
The majority of the contract value, $1.1 billion, is allocated for the engineering, procurement, and construction of utility-scale solar projects. These projects also encompass around 800 MWh of battery energy storage systems, reflecting Primoris’s strategic goal to expand its solar service offerings. Additionally, $100 million is earmarked for the expansion of multiple combustion gas turbine generators, highlighting the company’s robust capabilities in natural gas generation.
Primoris president and CEO Tom McCormick emphasized the strong demand for the company's utility-scale solar and natural gas solutions. McCormick attributed this demand to the growing need for power generation and the company’s solid customer relationships, underpinned by a proven track record of safe and successful project execution.
The projects are set to commence mobilization in the latter half of 2024 and continue through the second quarter of 2025. These contracts are expected to significantly enhance PRIM's growth prospects, solidifying its position in the renewable energy and power generation sectors.
The recent contract wins not only underscore Primoris’s market strength but also align with its strategic objectives, positioning the company for sustained growth and expanded service offerings in the rapidly evolving energy market.
Energy/Renewables’ Continuous Contract Flow: A Boon
Shares of this leading specialty contractor have outperformed the Zacks Building Products - Heavy Construction industry in the year-to-date period. The company has been benefiting from solid performance across the segments. The U.S. administration’s renewable energy drive is expected to boost its growth.
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Primoris is experiencing robust growth, driven by the increasing demand for its Energy and Utilities services amid North America's energy transition and infrastructure modernization efforts. The company's solar and industrial businesses are seizing opportunities to meet the rising demand for power generation, while its power delivery business is supporting the heightened need for transmission and distribution services.
In first-quarter 2024, Primoris reported a 12.4% increase in revenues compared to the previous year, primarily fueled by strong growth in utility-scale solar and industrial construction within the Energy segment. Specifically, the Energy segment's revenues surged 33.4% year over year, driven by increased solar project activity and industrial construction in the Western United States, though partially offset by lower pipeline activity.
As of Mar 31, 2024, Primoris' total backlog stood at $10.6 billion, with both the Utilities and Energy segments each contributing $5.3 billion. This substantial backlog underscores the growing demand for Primoris' services and its ability to drive continued growth.
Zacks Rank & Key Picks
PRIM currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are:
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The consensus estimate for GLDD’s 2024 sales and EPS implies increases of 26.7% and 414.3%, respectively, from the prior-year reported levels.
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