Sterling books 73% jump in Q1 profit as revenue rises

ConDig (13-May-20).  Profit at Texas-based civil contractor Sterling Construction Co surged 73% in the first quarter of this year as revenue shot up on improved earnings in its heavy civil and specialty services divisions that offset a drop in residential.

Net income increased to $3.1 million in the three months ended March 31 compared with $1.86 million in the same period a year earlier. 

It comes as group revenue increased to $296.7 million from $223.9 million in the year-ago period, while the company reported a record project backlog of $1.2 billion and a backlog gross margin of 12.7%. 

Sterling’s heavy civil division posted revenue of $155.6 million compared with $150.5 million and the specialty services division booked earnings of $104.7 million compared with $30.6 million in the first quarter of last year.

This offset a 16% drop in residential revenue to $36.4 million from $42.7 million in the same period last year.
The company said the residential market was impacted by heavy March rains, but was up sequentially over the fourth quarter as it continued to expand into the Houston market. 

It added that although the group’s heavy civil division hit its financial expectations, the segment saw the largest unfavorable productivity impact in the first quarter related to the COVID-19 pandemic as customers and back offices began to work virtually, while new procedures and protocol were developed and implemented into field operations. 

Sterling’s chief executive officer Joe Cutillo said that the company had decided to withdraw its previous financial guidance until it has greater visibility into the struggling residential market.

“We have record backlogs in both the heavy civil and specialty services segments and remain in an enviable position versus many other businesses. However, we expect to begin to see more significant impacts related to the COVID-19 pandemic in the second and third quarters as our home builder customers expect demand to slow, and new commercial projects related to multifamily and offices may be delayed,” he said.

Last month, a subsidiary of Sterling Construction secured a $80 million contract to upgrade the Bucholz Army airfield runway in the Kwajalein Atoll of the Marshall Islands.

Be the first to comment on "Sterling books 73% jump in Q1 profit as revenue rises"

Leave a comment

Your email address will not be published.


*