Cardinal Contractors, a unit of the East Construction Services segment of Primoris Services CorporationPRIM has secured a new water contract worth $16 million from a municipal customer in Texas. The project work is slated to begin in the third quarter of 2015 and expected to be completed in the third quarter of 2017.
Per the deal, Primoris will build a new pump station at 59th street in the City of Galveston, TX. The project work also involves demolition of the existing pump station, installation of piers and construction of a new pump.
The City of Galveston experienced various hurricanes and storms in the past which resulted in severe damages. The storms left Galveston without electricity, gas, water and basic communications. The city believes the new pump will guarantee that the entire island continues to have potable water during and after a hurricane event.
So far in 2015, Cardinal Contractors has received two water contracts including this project. The first contract was awarded in March for the construction of new pretreatment facilities to improve the quality and efficiency of the existing membrane filtration system for the residents and business of Abilene.
Primoris witnessed a dismal second-quarter 2015 with decline in earnings and revenues. Revenues declined mainly due to decreased sales in the Energy segment. Decreased revenues in the industrial and pipeline end-markets impacted energy segment's revenues during the quarter. However, Primoris remains optimistic about drivers for business which remains positive.
Primoris is also positive about bidding opportunities for the rest of this year and next year. This will continue to increase backlog in the second half of the year, into 2016 and beyond. Large capital replacement programs and integrity plans will also aid growth in the utility market and in turn, boost revenues.
The company recorded backlog of $2.20 billion as of Jun 30, 2015, increasing from $1.99 billion as of Dec 31, 2014. 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).