Granite Construction Report Positive Despite Loss

Despite higher first-quarter revenues and a growing work backlog, Granite Construction reported a loss of 57 cents per share in its most recent quarterly report. The economy and sluggish building climate continue to challenge the publicly owned company, one of the nation’s largest infrastructure contractors and construction-materials producers.

First-quarter revenues were $378.7 million compared with $310.2 million in the first quarter a year ago. The numbers included $63.7 million in revenues from Kenny Construction. The company’s loss of $22 million, or a loss of 57 cents per diluted share, compared with a net loss of $11.8 million, or a loss of 31 cents per diluted share, for the first quarter of 2012. Total contract backlog was $2.4 billion compared with $1.7 billion at year-end or $2.1 billion a year ago.

Construction revenues in the first quarter were $177.1 million compared with $117.9 million a year ago, including $53.3 million associated with Kenny. Large project construction revenues were $171.7 million compared with $163.9 million a year ago and construction materials revenue for the quarter totaled $29.8 million compared with $25.6 million for the same period last year.

“Granite’s short-term results and outlook have been impacted negatively by the competitive environment in certain markets related to our construction and construction materials businesses, particularly in California,” said James H. Roberts, Granite chief executive officer and president.

On a conference call with analysts and investors, company executives said they anticipated a turnaround by the end of the year, including double-digit revenue growth. Roberts said the company’s business fundamentals remain strong “and our future is very bright.”

“As our construction season moves into full swing, our teams are bidding a high volume of work for various public and private customers,” Roberts said. Certain parts of the country are already picking up and should help the national outlook, but some markets were hit harder than others so the company will continue to look at cost-cutting measures, he noted. “We are confident that a recovery in the private construction market will help drive significant long-term operational and financial performance.”

Granite has about 1,700 salaried employees. The company also averages about 3,100 hourly employees throughout the year.

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