Granite Construction announced results for the third quarter ended Sept. 30, reporting that net income increased to $35.0 million, or $0.73 per diluted share, compared to a net loss of $91.2 million, or $2.00 per diluted share, for the same period last year. The company also reported:
- Revenue of $1.1 billion, essentially flat compared to the same period last year.
- Gross profit decreased to $119.9 million compared to $126.0 million for the same period last year, while gross profit margins remained relatively flat for the same period.
- Selling, general, and administrative (SG&A) expenses were $77.6 million or 7.3% of revenue, compared to $72.9 million or 6.8% of revenue for the same period last year, primarily driven by an increase in incentive compensation expense.
- Committed and Awarded Projects (CAP) totaled $4.3 billion, up $135.4 million compared to the same period last year, and down $117.4 million since the second quarter of 2021.
Materials revenue in the third quarter increased compared to the same period last year led by continued strong demand and volumes in the vertically integrated California and Northwest operating groups. Third-quarter gross profit decreased compared to the same period last year as oil related costs returned to 2019 levels and the current year pricing did not benefit from low fuel and liquid asphalt costs experienced during the third quarter of 2020.
Transportation revenue in the third quarter decreased compared to the same period last year because of Granite’s efforts to narrow the footprint of the Heavy Civil Operating Group and because of decreased revenue in the California Operating Group. The decreased revenue in the California Operating Group was primarily due to an extended competitive bidding environment early in 2021 contrasted with an exceptional third quarter of 2020 which was bolstered by owner worksite accommodations. Third-quarter gross profit increased compared to the same period last year primarily due to a decrease in project losses related to the Heavy Civil Group ORP.
“This quarter, we made progress by working through the challenging ORP projects in the Heavy Civil Operating Group and by growing high-quality CAP in our vertically integrated California and Northwest operating groups,” explained Kyle Larkin, Granite president and CEO. “There is more work to do with the ORP, and we remain focused on project execution across our business. Opportunities in our markets are robust, cash and liquidity remain a strength, and I am confident we are positioning the company to continue on its path for improved financial performance.”