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Granite Construction optimistic despite quarterly loss

By |  May 3, 2017

Granite Construction Inc. reported a net loss of $23.8 million for the first quarter this year.

According to Granite Construction, it lost $10.4 million in the first quarter of 2016.

“Despite the loss in the first quarter, we maintain our strong growth expectations for 2017,” says James Roberts, president and CEO of Granite Construction. “[The] overall outlook and direction of our business is excellent, with market improvements being seen across our portfolio.”

Roberts cited the California legislature’s approval of SB 1, the Road Repair and Accountability Act of 2017, as a reason for optimism. The bill commits more than $52 billion of incremental investment in the state over the next decade, Granite Construction says.

“This combines with the nearly $190 billion of long-term local measures passed by voters in California and Washington state last November to signal a significant, positive shift in public infrastructure investment,” Roberts says. “Our vertically integrated teams in the West are well prepared to handle the growth, as these businesses are still operating well below capacity.”

Granite Construction’s bidding and booking activity remained healthy in the first quarter, the company says. This activity drove the company’s construction segment backlog more than 17 percent higher than 2016 to nearly $1.18 billion – an all-time record level,” Roberts adds.

“Due to significant rainfall throughout the West, the construction materials segment was unable to get any traction for production in the quarter,” he says. “Operations at almost all of our facilities were delayed until materials deposits dried for efficient aggregate and asphalt production, which began at some locations in April. We believe secular demand is improving.

“Despite the weather-impacted start, we continue to expect stronger demand, and execution will spur our materials businesses to deliver top- and bottom-line improvement this year,” Roberts continues. “Similarly, our construction segment is poised for an exceptional year, having gotten off to a solid start even with weather headwinds.”

According to Granite Construction, its first-quarter consolidated revenue increased 6.6 percent to $468.4 million. That compares to $439.5 million in the first quarter of 2016. Gross profit decreased to $25.1 million compared with $39.2 million last year, and the company’s gross profit margin was 5.4 percent compared with 8.9 percent in 2016.

The company’s construction materials revenue was flat compared to last year at $34.5 million. Also, Granite Construction’s first-quarter gross loss expanded to $5.4 million compared to a loss of $1.2 million last year, Granite Construction says.

Granite Construction continues to expect low-double digit consolidated revenue growth for 2017, as well as a consolidated EBITDA (earnings before interest, tax, depreciation and amortization) margin of 6.5 to 7.5 percent.

Kevin Yanik

About the Author:

Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or

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