Great Lakes Dredge & Dock Corporation (GLDD - Free Report) has won a Base and Option B contract valued at $105 million to support the Jacksonville Harbor Construction Dredging, 47-Foot Contract C Cut-42 Project.
Located in Duval County, Jacksonville, FL, Great Lakes will dredge approximately 4.1 million cubic yards of unclassified material from roughly 1.7 nautical miles (Cut-42) of the St. John’s River. This will improve shipping channel safety and efficiency with the deepening and widening of the channel, as well as expand turning basin and berths at Jacksonville Port Authority Blount Island Marine Terminal to an authorized 47-foot depth.
Notably, the deepening work is essential for the accommodation of the world’s larger deep draft ships that are capable of transporting more cargos across Asia and other markets through both Panama and Suez canals.
Importantly, all excavated sand, gravel and rock soils will be transferred to designated areas within the Jacksonville Ocean Dredged Material Disposal Site. The work is expected to begin in fourth-quarter 2020 and likely to be completed (both base contract and all options) in second-quarter 2022. Great Lakes expects the U.S. Army Corps of Engineers to offer additional option work, valued at $11.5 million, by mid-2021.
Moreover, Great Lakes will ensure efficient execution of the excavation process with the help of its fleet of mechanical dredges that includes the largest clamshell and backhoe dredges in the U.S. market — the Dredge 58 and Dredge New York.
U.S. Dredging Operation Bodes Well
Great Lakes is the largest provider of dredging services in the United States. The company mainly banks on strong domestic dredging operations, high equipment utilization, solid project execution and savings from restructuring.
Shares of this Zacks Rank #3 (Hold) company have outperformed the industry in the past month. Despite low revenues for the second quarter, the domestic bid market remained strong with $428.6 million in total project bids, of which Great Lakes won $92.5 million of capital, maintenance and coastal protection projects. Also, it won $63.4 million in project work and an additional $32 million in low bids pending award.
Recently, it was awarded several major dredging works in South Carolina, North Carolina, Texas, Mississippi, Louisiana and New York. These contracts, which incorporate deepening, coastal protection and maintenance dredging work, are valued at $118.8 million.
We believe the company’s strong bidding ability and project execution will boost its performance in 2020 and 2021. The Zacks Consensus Estimate for 2020 earnings is currently pegged at $1.06, indicating a 23.3% year-over-year improvement.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Some better-ranked stocks in the same industry include Dycom Industries, Inc. (DY - Free Report) , North American Construction Group Ltd. (NOA - Free Report) and Primoris Services Corporation (PRIM - Free Report) , each sporting a Zacks Rank #1. Dycom, North American Construction and Primoris are expected to generate earnings growth of 24.2%, 8% and 5.6% for the current year, respectively.
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