Granite Construction Inc. reported that third quarter 2018 revenue was up 10.3 percent year-over-year to $1.06 billion. Third quarter 2018 net income of $55.7 million was an increase of 21.1 percent from net income of $46.0 million in the third quarter of 2017.
For its materials segment, third quarter 2018 revenue increased 32.1 percent to $129.6 million, compared with $98.1 million last year. Year-to-date 2018 revenue increased 30.4 percent to $276.3 million, compared to $211.8 million last year.
- Quarterly gross profit improved 9.9 percent to $21.3 million from $19.4 million last year, with gross profit margin of 16.4 percent down from 19.8 percent last year.
- Year-to-date gross profit increased 30.6 percent to $36.3 million from $27.8 million last year, with gross profit margin steady at 13.1 percent.
- The quarterly and year-to-date revenue and profit growth was attributable primarily to improved external demand across most markets, while maintaining an expectation of overall mid-teen gross margins in the segment.
“In 2018, Granite has executed our strategy to develop a leadership position as America’s Infrastructure Company,” said Granite President and Chief Executive Officer James H. Roberts. “Acquisitions have helped us to deliver profitable geographic and end-market diversification, and this action highlights the significant opportunities we have to expand Granite’s platforms for growth in the new Transportation, Water, Specialty and Materials segments.”
“Our focus has remained intent on improved profitability this year, and our teams, new and old, have delivered,” Roberts said. “Demand for projects across all segments of our business remains strong as we maintain our deliberate emphasis on improved pricing. Increased pricing is creating solid bottom-line improvement, while having an expected, near-term impact on project win rates, most notably transportation projects. Transportation demand continues to strengthen, fueling expected growth in project bookings and revenue that, coupled with our ongoing pricing discipline, will spur improved segment margin performance for quite some time.”
Roberts continued, “Our pricing strategy is sound, built upon both practical and strategic considerations, especially given the healthy balance of near- and long-term public- and private-market demand. This year’s highly focused work on pricing discipline illustrates the broad leverage our business can exert to create bottom-line results and steadily improving capital returns on the significant, long-term investments that underpin our business. Our focus remains on sustained pricing discipline to deliver consistent, balanced, risk-adjusted returns across end markets.”
The company noted that significant voter support across the country for incremental infrastructure investment is spurring state and local governments and politicians to action. Voters increasingly understand and support the sustained, increased infrastructure investments that are required to improve public safety, create jobs, drive economic expansion, and improve Americans’ quality of life.