Granite Construction Incorporated’s (GVA - Free Report) wholly-owned subsidiary, Kenny Construction Company, has won a $60 million interstate reconstruction contract from the Illinois Department of Transportation. The project will be booked into backlog during the third quarter of 2015. Work is slated to begin in fourth-quarter 2015 and is expected to be completed by winter 2017.
The scope of work for Granite Construction entails the reconstruction and widening of the inbound bridge structures of I-55 (Stevenson Expressway) and US-41 (Lake Shore Drive) including three new bridges, three new retaining walls, lighting, roadway reconstruction and other related work. This urban expressway, adjacent to McCormick Place and Soldier Field, connects the neighborhoods and the lakefront from the south to the Central Business District and the Loop to the north. The project also includes repairing the aging roadway that will help in efficient movement of traffic.
Last week, Granite Construction was awarded a $72 million contract to build new outlet structures at the Addicks and Barker Dams in Houston, TX by the U.S. Army Corps of Engineers (USACE). This project will also be booked into the company’s backlog during the third quarter of 2015.
Granite Construction’s second-quarter earnings per share declined 31% year over year to 24 cents. The bottom line also missed the Zacks Consensus Estimate of 42 cents by a wide margin of 43%. Total contract backlog increased 17% year over year to $3 billion in the quarter.
The company retained its 2015 guidance and expects consolidated revenue growth in the mid-single digits and consolidated EBITDA margin of 6% to 8%.
Granite Construction is poised to benefit from modest economic improvement. The company remains focused on opportunities to leverage pent-up demand as the funding environment is progressing. While Congress is holding up long-term highway bill, the company is actively ramping up the execution of its strategic plan based on its optimism on the bill.
Granite Construction’s sound backlog and several additional awards bode well for its future performance. A new long-term highway bill is essential to ensure longer-term funding that can meet the increasing demand for critical infrastructure projects across the country.
Watsonville, CA-based Granite Construction is a leading infrastructure contractor and construction materials producing company. Its project teams represent the best in the industry; serving both public and private-sector clients in transportation, power, federal, tunneling, underground, industrial/mining and water resources markets.
Granite Construction currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the sector include China Railway Construction Corporation Limited , China Railway Group Limited and Dycom Industries Inc. (DY - Free Report) . All these stocks carry a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>