Two units of Primoris Services Corporation (PRIM - Free Report) announced the authorization for an additional $138 million on an existing industrial and civil award. Primoris Energy Services' industrial division and James Construction Group's (JCG) civil division have jointly secured the contract from a major petrochemical company.
Per the contract, Primoris will work at their multi-billion dollar expansion site in Louisiana. This contract award was first announced in Nov 2014, with a value of $290 million. In Aug 2016, the company secured an additional $46.6 million authorization for the project.
Work on the project began in the fourth quarter of 2014, and currently planned completion is expected in third-quarter 2017. This work is being done under a cost-reimbursable contract.
The extra authorizations added approximately $134 million to Primoris’ Energy backlog and approximately $51 million to the East backlog during the third quarter of 2016.
Over the next four quarters, Primoris is anticipated to realize revenues of around 64% from the East Construction Services segment backlog, about 68% from the West Construction Services segment backlog and 97% from the Energy segment.
Notably, Primoris Energy Services is part of the Energy segment of the company. The segment accounted for 23% of Primoris’ total revenue during second-quarter 2016, marking a 21% year-over-year increase. Further, JCG is a unit of the East Construction Services segment which accounted for 28% of total revenue during the quarter. The segment recorded a 17.7% year-over-year decline in revenues.
Nevertheless, Primoris is positive about bidding opportunities, which will continue to increase its backlog. Moreover, benefits from geography and market diversity, together with the expected boom in capital pipeline construction, will boost revenues.
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.
At present, Primoris has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the construction sector are MasTec, Inc. (MTZ - Free Report) , Dycom Industries Inc. (DY - Free Report) and Gibraltar Industries, Inc. (ROCK - Free Report) .
MasTec has witnessed solid estimate revisions of 1.5% over the past 30 days. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dycom Industries, which carries a Zacks Rank #2 (Buy), has seen upward estimate revisions of 1.9% over the last 60 days.
Gibraltar Industries, also a Zacks Rank #2 stock, has seen upward estimate revisions of around 4.2% over the past 90 days.
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