ARB Underground, a unit of Primoris Services Corporation (PRIM - Free Report) , recently announced a new Master Service Agreement (MSA) with a major utility customer for approximately $21 million. Per this one-year MSA agreement, Primoris will perform natural gas pipelines construction services in South California.
The scope of work comprises transmission and distribution pipeline installations, service installations, valve installations, miscellaneous gas work, street repair work, and crew oversight. The majority of the work will be for the customer’s small-diameter gas distribution systems.
ARB Underground is part of Primoris' Utilities & Distribution segment. In second-quarter 2017, all four of Primoris’ operating segments recorded revenue growth, helping it to attain the highest quarterly revenues in the company's history.
Net sales jumped 35.5% year over year to $212.9 million in the Utilities and Distribution segment. Most of this growth was driven by increased volumes at the ARB Underground division and the Q3C division.
The company is poised to benefit from its efforts to strengthen the sales teams and consequently more consistent project wins. In addition to investing in equipment, Primoris is also striving to grow through acquisitions. Also, bidding opportunities remain robust, which will likely continue to increase the company’s backlog.
Over the past year, Primoris has outperformed the industry which it belongs to. The company’s shares have gained around 49.4% compared with roughly 13.9% growth recorded by the industry during the same time frame.
Zacks Rank & Stocks to Consider
Primoris currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the construction sector include Winnebago Industries, Inc. (WGO - Free Report) , KB Home (KBH - Free Report) and Owens Corning (OC - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
Winnebago Industries sports a Zacks Rank #1 (Strong Buy) and has an average positive earnings surprise of 29.54% for the trailing four quarters.
KB Home carries a Zacks Rank #2 (Buy) and pulled off an average positive earnings surprise of 12.67% over the last four quarters.
Owens Corning also holds a Zacks Rank #2 and generated an average positive earnings surprise of 20.17% during the same time frame.
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