Yahoo Finance Granite Construction's (GVA) JV ARC Wins Multiple CM/GC Deal
Granite Construction Incorporated GVA and California Engineering Contractors’ joint venture company — American River Constructors (ARC) — secured a contract from the California Department of Transportation (Caltrans) for the American River Bridge (ARB) Rehabilitation Construction Manager/General Contractor (CM/GC) project in Sacramento, CA.
The company recently completed a CM/GC Preconstruction Service contract initiated in January 2021.
In addition to the above-mentioned contract, three minor contracts, worth of $70 million, were executed for access, clearing, steel piling, girder procurement and bridge substructure construction.
Recently, a $131-million parent project was also included in Granite’s second-quarter 2023 Committed and Awarded Projects (CAP), which aims to construct the superstructure for replacing the existing bridge deck in three stages. The project is likely to be completed in the first quarter of 2026.
The project work includes the removal and replacement of the existing concrete deck and steel girder post-tensioning systems in spans one and two, along with widening the shoulder to facilitate traffic during construction. ARC will also construct a class 1 bike path linked to existing bike trails on the bridge.
CAP Solidifying Granite’s Growth Prospects
Shares of GVA have rallied 34.5% in the past year against the Zacks Building Products - Heavy Construction industry’s 3.3% rise. The consistent award wins have been driving GVA’s performance. The company is focused on growing a high-quality CAP portfolio on the back of a positive public funding environment and resilient private market.
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During third-quarter 2023, total CAP reached a record balance of $5.6 billion, up 2.7% sequentially and 37% year over year. The uptrend was driven by solid public and private work environments across all its geographies. Also, the range of opportunities came through with the Federal Infrastructure Bill being added to growth momentum.
Under the Construction segment, CAP in California group came in at $2.35 billion, flat sequentially and surging 51% year over year. The results are backed by solid Caltrans’ highest dollar value contracts. The company expects high-bid opportunities to continue in 2024. Mountain group’s CAP declined 4.3% sequentially but increased 43.3% year over year to $1.43 billion.
In the third quarter, the Construction segment reported revenues of $945.7 million, up 11.6% from the prior-year quarter’s levels. The upside can be attributed to higher levels of CAP, especially in the California and Mountain groups. Granite expects that the current CAP level will continue to support the segment throughout 2023.
Zacks Rank & Other Key Picks
Granite Construction currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks from the Zacks Construction sector are:
Construction Partners, Inc. ROAD sports a Zacks Rank #1. ROAD has a trailing four-quarter earnings surprise of 10.6% on average. Shares of ROAD have gained 36.7% in the past year.
The Zacks Consensus Estimate for ROAD’s 2023 sales and earnings per share (EPS) indicates gains of 19.3% and 112.2%, respectively, from the year-ago period’s levels.
EMCOR Group, Inc. EME carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 25%, on average. Shares of EME have risen 40.9% in the past year.
The Zacks Consensus Estimate for EME’s 2023 sales and EPS suggests growth of 11.3% and 44.2%, respectively, from the year-ago period’s levels.
TopBuild Corp. BLD sports a Zacks Rank of #2. It has a trailing four-quarter earnings surprise of 14.3%, on average. Shares of BLD have surged 95.5% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and EPS indicates gains of 3.8% and 13.1%, respectively, from the year-ago period’s levels.
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Construction Partners, Inc. (ROAD) : Free Stock Analysis Report
