Watsonville, Calif.-based Granite Construction has reported a net loss of $12 million, or $0.31 per diluted share, for the first quarter of 2012 compared with a net loss of $9 million, or $0.24 per diluted share, for the first quarter of 2011.
“Overall, I am pleased with our start to the year as mild weather allowed many of our business units to work throughout the quarter, which is typically a slow quarter for our business,” said James H. Roberts, Granite president and CEO, said in a written statement. “Our results are in alignment with our expectations for the year,” Roberts added.
“As we manage our way through today’s challenging market, we are also following a well-developed plan that will further strengthen our company and position us for long-term profitable growth,” Roberts continued in the written statement. “We are encouraged by the opportunities to grow, diversify our business model and optimize our asset portfolio. We also remain intensely focused on increasing efficiencies and controlling costs throughout the company.”
First-quarter 2012 Financial Results
- Revenue totaled $310 million compared with $257 million in 2011, driven by increases in Large Project Construction and Construction segment revenues.
- Gross profit margin was 8 percent compared with 12 percent in 2011. First quarter 2011 gross profit was impacted by the recognition of deferred profit on a project in New York.
- Selling, general and administrative expenses for the first quarter were $43 million, essentially flat compared to a year ago. Included in 2012 was a net gain on restructuring of $2 million related to divestiture activities of our real estate investment business.
- Operating loss for the quarter was $16 million compared with $11 million in the prior year driven largely by a decrease in gross profit.
- Other income, net for the quarter was $7 million compared with $1 million last year due primarily to a gain on the sale of gold, a by-product of aggregate production.
- Net income attributable to noncontrolling interests in joint ventures was $3 million compared with $2 million in 2011.
- Total contract backlog at March 31, 2012, was $2.1 billion compared with $2.0 billion a year ago.
- Construction revenue for the quarter increased 27 percent to $118 million due to a higher volume of work completed in the quarter related to mild weather throughout the West as well entering the year with a higher volume of backlog.
- Gross profit margin for the first quarter was 7 percent compared with 6 percent a year ago.
Large Project Construction
- Large Project Construction revenue for the quarter increased 19 percent to $164 million reflecting continued progress on projects throughout the country.
- Gross profit margin for the quarter was 14 percent compared with 23 percent for the same period last year. The decrease is largely associated with deferred profit that was recognized on a large project in New York during the first quarter 2011.
- Construction Materials revenue for the quarter totaled $26 million compared with $24 million for the same period last year.
- Gross loss on the sale of construction materials was $6 million compared with $7 million in 2011.
“We are encouraged by the number of Large Project opportunities as well as the healthy bidding activity we are seeing throughout many of our markets in the West. Our outlook is tempered, however, by the intensely competitive environment that we anticipate will continue through the balance of the year,” Roberts said.
For 2012, Granite expects Construction segment revenue to be $1 billion to $1.1 billion with a corresponding gross profit margin between 9 percent and 11 percent. Large Project Construction segment revenue is expected to be $1 billion to $1.1 billion with a corresponding gross profit margin between 12 percent and 14 percent. Construction Materials segment revenue is expected to be $200 million to $220 million with corresponding gross profit margin between 7 percent and 9 percent. In addition, sales, general and administrative expenses are expected to be between $170 million and $180 million for the year and net income attributable to non-controlling interest in joint ventures for the total company is expected to be in the range of $15 million to $18 million.