Great Lakes Dredge & Dock Corporation (GLDD Quick QuoteGLDD - Free Report) won a $157.4 million firm-fixed-price contract from the U.S. Army Corps of Engineers, Galveston, TX. Per the contract, GLDD will build and maintain hopper dredging of the Freeport Harbor Channel.

The work is estimated to be complete by Apr 14, 2026.

In the after-hours trading session on May 30, its shares inched up 0.62%. The stock gained 15.3% in the past three months versus the Zacks Engineering - R and D Services industry’s 0.5% fall.

The upside in the recent price movement can be attributable to solid earnings growth expectations and the VGM Score. The Zacks Consensus Estimate for 2023 earnings is currently pegged at 10 cents, up 123.8% year over year on 4.5% revenue growth. Currently, GLDD has a Growth and Momentum Score of B.

Recently, the company reported its first-quarter 2023 results. Despite facing continued challenges related to weather delays in the Northeast and a lower-than-normal amount of capital work, the company benefited from more project work for the vessels and initiatives undertaken to improve profitability. It has taken swift and proactive action on cost reductions and fleet adjustments. Also, GLDD is adjusting its general and administrative, overhead cost structures and dredging fleet to reflect the changed market conditions, which have already led to substantially reduced costs in 2023.

Strong Bidding & Project Execution 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.

In March, it was awarded several major dredging works for $138.8 million in Puerto Rico, New Jersey and Florida. These contracts incorporate coastal protection and maintenance dredging work and most of the work is likely to be completed by the spring of 2023.

First-quarter total bid market was more than $300 million, which is approximately 71% higher than the first quarter of 2022. The port deepening and widening projects that were delayed in 2022 have started to enter the market. Also, the first quarter bid includes one capital project. Also, it ended the quarter with $327.1 million of dredging backlog, which does not include its third largest domestic capital project in history, worth $160 million.

We believe the company’s strong bidding ability and project execution, along with improved market conditions, fleet adjustment and cost reduction initiatives, will boost its performance in 2023 and beyond.

Zacks Rank & Key Picks

Currently, STRL carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A few better-ranked stocks in the Zacks Construction sector are:

Sterling Infrastructure, Inc. (STRL Quick QuoteSTRL - Free Report) , currently carrying a Zacks Rank #2 (Buy), provides transportation, e-infrastructure and building solutions.

STRL’s expected earnings growth rate for 2023 is 11.4%.

Willdan Group, Inc. (WLDN Quick QuoteWLDN - Free Report) , sporting a Zacks Rank #1 at present, is a nationwide provider of professional, technical and consulting services to utilities, government agencies and private industry.

WLDN’s expected earnings growth rate for 2023 is 39.8%.

Howmet Aerospace Inc. (HWM Quick QuoteHWM - Free Report) , carrying a Zacks Rank #2 at present, is a global manufacturer of engineered products serving the aerospace, defense and commercial transportation industries. The company is expected to benefit from higher aircraft production rates and an easing of supply chains in the transportation market. Importantly, share gains in the titanium aerospace market are expected to act as a major growth tailwind.

HWM’s earnings for 2023 are expected to grow by 20.7%.