Great Lakes Dredge & Dock Corporation

Great Lakes Dredge & Dock Corporation (GLDD - Snapshot Report), which operates dredging projects around the world, saw revenue surge 32% to a first quarter record. It also has its eyes on possible stimulus projects. GLDD surprised on estimates by 550%.

Company Description

Great Lakes Dredge & Dock is the largest provider of dredging services in the United States. Founded in Chicago in 1890, the company has been involved in some of the largest dredging projects in the country including the creation of Lower Wacker Drive in Chicago.

The company's fleet consists of 13 Cutter Suction Dredges, 8 Hopper Dredges, 6 Bucket Dredges, 2 Drill boats, 1 Unloader, 7 Booster Pumps and 184 support vessels.

Great Lakes' vessels deepen shipping channels, reclaim land from the ocean and assist with beach restoration for storm-damaged coastlines.

About 25% of the company's operation is outside of the United States, with a large portion of the international business located in the Middle East.

Additionally, Great Lakes also has a 50% interest in a marine sand mining operation located in New Jersey which supplies sand and aggregate used for road and building construction.

First Quarter Sees Record Revenue

Great Lakes is operating on all cylinders as it reported record revenue for the first quarter and maintains a solid year-end backlog. The company will also likely be able to nab a portion of the $350 million to $400 million allocated in the stimulus bill to dredging projects that must be awarded in the next 18 months.

Revenue jumped 32% to $179.2 million from $135.7 million in the year ago quarter. Dredging revenue climbed 66% over a year ago as fleet utilization was improved across all sectors. The prior year quarter was also negatively affected by temporary loss of the dredge New York and downtime of several vessels.

The company continued its projects in the Ports of New York, New Jersey, and Tampa, along the Columbia River in Oregon and its coastal restoration work in Louisiana. Internationally, it continued work on the Diyar project in Bahrain.

Net income was $7.3 million, or 13 cents, compared to a loss of $1.2 million, or a loss of 2 cents a share, in the first quarter of 2008. Analysts expected just 2 cents in the quarter.

Backlog

As of Mar 31, the backlog was $344 million compared to $418 million at the end of December 2008. Included in the first quarter backlog is about $57 million remaining on the Diyar land reclamation project in Bahrain which was reclassified from backlog to options pending status so the customer could control the timing of the completion of the project.

Consensus Estimates Rise

Given the results of the first quarter and the prospects for possible stimulus projects going forward, covering analysts have been raising estimates for the second quarter and the full year.

Second-quarter consensus estimates rose 2 cents to 6 cents from 4 cents in the last 30 days.

Full year estimates jumped 81% to 29 cents from 16 cents per share in the last month with all 3 covering analysts raising during that time.

Value Fundamentals

Great Lakes Dredge & Dock is a Zacks #1 Rank (strong buy) stock. It has a P/E of 13.6x forward earnings. The company's price-to-book is 1.12. GLDD also pays a dividend, with a current yield of 1.70%.

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