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Granite Construction today reported a net loss of $41.0 million, or $1.09 per diluted share, for the first quarter of 2010 compared with net income of $8.9 million, or $0.23 per diluted share, for the first quarter of 2009.
Below is a snapshot of the results, followed by a more detailed report:
“As we previously announced, throughout the quarter we continued to experience a challenging and competitive market environment in addition to extremely poor weather across the country,” said Granite President and Chief Executive Officer William G. Dorey in a press release from the company. “Although the first quarter is typically our weakest due to the seasonal nature of our business, this was one of the wettest first quarters we have experienced in quite some time.”
First-quarter 2010 financial results
Revenue totaled $220.7 million compared with $347.4 million in 2009, driven by weakness in demand and the impact of weather. First-quarter 2009 included approximately $46.0 million in revenue associated with work performed on the border fence project in the Southwest and $17.3 million related to a favorable settlement on a project in the East.
Large-project construction revenue for the quarter totaled $106.3 million compared with $149.1 million for the same period last year. The decrease is attributable primarily to less revenue generated from projects nearing completion and new projects getting under way. First quarter 2009 revenue also included $17.3 million related to a favorable settlement on a project in the East.
“We expect 2010 to be a challenging year for our business,” said Dorey. “Competition for the available work remains tough, and we expect gross margins on smaller projects to remain under pressure for the balance of the year. In addition, we now expect the Houston Metro Light Rail and the Queens Bored Tunnel projects to reach our profit recognition threshold in 2011, not 2010 as previously anticipated.
“Despite the challenging market conditions, we have a substantial number of bidding opportunities, and we expect backlog to increase throughout 2010,” Dorey continued. “Longer-term, we expect to see the demand for our construction services and materials improve as the private development market begins to see signs of a recovery.
“For the full-year 2010, we expect Construction segment revenue to be $1.05 billion to $1.25 billion with a corresponding gross profit margin between 11.5 percent and 13 percent. Large Project Construction segment revenue is expected to be $725 million to $825 million with a corresponding gross profit margin of between 10 percent and 12 percent. Construction Materials segment revenue is expected to be $200 million to $250 million with corresponding gross profit margin between 12 percent and 13 percent. In addition, net income attributable to non-controlling interest in joint ventures for the total company is expected to be $20 million to $25 million,” said Dorey.
Granite will conduct a conference call tomorrow, May 4, 2010, at 8 a.m. Pacific time/11 a.m. eastern time to discuss the results of the quarter ended March 31, 2010. Access to a live audio webcast is available at www.graniteconstruction.com/investor-relati
ons. The live conference call may be accessed by calling 877-693-6483, or 706-758-5304 for international listeners. The conference ID for the call is 67074808. The call will be recorded and will be available for replay from approximately two hours after the live audio webcast through May 18, 2010, by calling 800-642-1687 or 706-645-9291. The conference ID for the recording is 67074808.