ConDig (1-Aug-17). Profit at Granite Construction Inc was roughly flat in the second quarter compared with the year-ago period despite revenue at the civil contractor and construction materials producer shooting 26.2% higher.
Watsonville, California-based Granite posted net income of $14.1 million for the quarter ended June 30 this year compared with net income of $14.2 million in the same period last year.
It comes despite revenue rising to $762.9 million compared with $604.6 million in the second quarter of 2016.
On a year-to-date basis, consolidated revenue increased 17.9% to $1.23 billion in the first half of 2017.
James H. Roberts, Granite president and chief executive officer, said the company sees significant expansions in the end-markets its supplies and has raised its outlook for the year.
Granite said it now expects revenue growth for the year to be in the mid-to-high teens, with a consolidated earnings margin of between 6% to 6.5%.
“As we enter the heart of our construction season, Granite teams are focused on solid safety performance and consistent execution of record backlog. We are extremely well positioned to benefit from steady private-market demand, as well as a significant uptick in key public transportation markets that is beginning this year and should continue for the foreseeable future,” Roberts added.
Revenue in the group’s large project construction division rose 29% in the second quarter to $254.5 million compared with $197.3 million last year.
Gross profit in the division dipped to $0.5 million compared with $13.7 million last year due to project write-downs totaling $23.8 million compared with $14.6 million in the second quarter of 2016.
In addition, there were no project write-ups in this year’s quarter compared with $9.8 million in the second quarter of last year.
In the construction materials division, revenue was $79.2 million compared with last year’s second quarter revenue of $75.9 million, while second quarter gross profit increased to $11.6 million from $10.5 million.
The gross profit and margin improvement was attributable to steady demand across geographies in the West of the country.
Earlier this week, Granite announced a $318 million contract for the second phase of the Kosciuszko Bridge replacement project in New York City.