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Primoris' Unit Wins Underground Contract worth $28M

ARB Inc., a unit of the West Construction Services segment of Primoris Services CorporationPRIM , has won two new underground contracts worth $28 million in Southern California. The scope of both projects includes substructure identifications, trenching, welding, backfilling, hydro testing, paving and final tie-ins.

The first contract was awarded by a large utility customer of Primoris. The project work involves installation of 2 miles long high pressure natural gas supply line under the Santa Ana River. Construction work will start immediately and will be completed in the fourth quarter of 2015.

The second contract is from a large EPC (Engineering, Procurement, Construction) customer. Contract work involves removal, abandonment and replacement of over 22,000 feet of high pressure jet fuel line. Work is slated to begin in Jan 2016, and is expected to be completed in the fourth quarter of 2016.

Primoris witnessed a dismal second-quarter 2015 with decline in earnings and revenues. However, revenues in the West Construction Services segment rose 6.5% year over year during the quarter due to increased revenues in large diameter pipeline and distribution end-markets.

Primoris is optimistic as the drivers for business remain positive. The company is also certain about bidding opportunities for the rest of this year and next year, which will continue to increase backlog in 2016 and beyond. Large capital replacement programs and integrity plans will also aid growth in the utility market and in turn, boost revenues.

During the next four quarters, Primoris is expected to realize revenues of around 52% from the East Construction Services segment backlog, about 69% from the West Construction Services segment backlog and 96% from the Engineering segment.

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.

Primoris currently has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the sector are China Railway Construction Corporation Limited CWYCY , China Railway Group Limited CRWOY and Dycom Industries Inc. DY . All these stocks sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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