Granite pares back losses in Q1 on revenue hike

ConDig (30-Apr-18). Granite Construction Inc trimmed losses in the first quarter of this year as the civil contractor and construction materials producer reported a 20.3% jump in revenue.

The California-based company posted a net loss of $11.4 million for the quarter ended March 31 compared with a net loss of $23.8 million in the first quarter of last year.

It comes as revenue surged to $563.4 million from $468.4 million in the first quarter of 2017.

Results for the quarter included the impact of acquisition expenses following Granite’s recent pending acquisition of Layne Christensen Co in a stock-for-stock $565 million deal. It also recently completed the purchase of LiquiForce. Excluding the impact of these expenses, first quarter loss was $5 million, the company reported.

Granite said that it expects low-double digit consolidated revenue growth this year and a consolidated earnings margin of between 7% to 8%.

“Our results and our outlook reflect our focus on execution of our strategic and operating plans, building and investing to capture the benefits of positive market trends. Demand continues to point to growth fueled by private market opportunities now combining with improving public funding trends across geographies and end markets,” said James H. Roberts, president and chief executive officer of Granite.

“These early-stage dynamics point to broad opportunities for the next three years or more. Aligned to our emphasis on efficiency and disciplined cost control, our expectations for steady top-line growth and solid bottom-line improvement remain in place across our business for 2018 and beyond,”

Gross profit at the group’s construction division in the first quarter surged 40.5% to $38.4 million compared with $27.3 million last year, while revenue increased 18.7% to $269.2 million from $226.8 million.

Granite said that solid execution drove the strong revenue and profit increases in the first quarter, which also resulted in year-over-year backlog burn in the division.

Project lettings and bookings ramped up in the quarter, reflecting improvement after soft demand across geographies in the fourth quarter of 2017. As a result, segment backlog finished at $978.3 million, an increase of 9.1% sequentially, it reported.

In the group’s large construction segment, gross profit increased to $20.4 million from $2.6 million last year. It comes as revenue rose to $248.4 million from $207.0 million last year.

The division’s backlog increased 15.4% year-over-year to $2.6 billion, while decreasing 7.6% sequentially.

“The market opportunities remain robust, as we continue to re-shape our project portfolio with improved project and partner selectivity, aligned to increased returns that balance project risk dynamics,” Granite said.

The construction materials division posted a 32.5% hike in revenue to $45.7 million, compared with $34.5 million last year. Gross loss was $2.5 million from a loss of $4.8 million last year.

Last week, Granite Construction announced that it had bagged a $27 million contract to revamp the Sterling Highway in Alaska.

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