ConDig (27-Oct-17). Civil contractor and construction materials producer Granite Construction Inc. booked a 24% rise in profit in the third quarter of this year on higher revenue.
The Watsonville, California-based company posted net income of $46 million for the quarter ended September 30, up from $37.2 million in the same period last year.
It comes as revenue jumped 19.1% to $957.1 million compared with $803.9 million in the third quarter of 2016, while the total company project backlog was $4.23 billion, up 12.5% year-over-year.
In the group’s construction division, gross profit rose 27.7% to $91.3 million from $71.5 million a year earlier as revenue surged 24.6% to $579.1 million compared with $464.6 million last year.
Project backlog at the division increased 16.4% from last year to a record $3.10 billion, reflecting the addition of two Granite-sponsored projects in the quarter.
“Accelerated activity on certain underperforming mature projects represented a significant amount of segment revenue. We continue to pursue resolutions for design, weather, and owner-related issues, while we close out several of these projects in late-2017 and through 2018,” said James H. Roberts, Granite president and chief executive officer.
Gross profit in the group’s materials division shot up 33% to $16.8 million compared with $12.6 million in the year-ago period, while revenue increased 9.1% to $98.1 million from $89.9 million.
The gross profit and margin improvement was attributable primarily to improved external demand across geographies in the West.
“Steady private market demand combined with improving public funding trends continue to provide our business with growth opportunities, across geographies and end markets,” said Roberts.
”We believe that we are in the early stages of this investment cycle, with much of the public market visibility tied to actions taken over the last few years at state and local levels to increase infrastructure investment.”
Last month, Granite announced that it had secured a $23 million contract to revamp the runway at San Diego County Regional Airport Authority.