Granite Construction shares second-quarter 2017 results

Construction materials revenue increased from $79.2 million to $75.9 million in the second quarter of 2017 at Granite Construction Inc., according to its latest quarterly performance report.

Second quarter gross profit from construction materials expanded to $11.6 million compared with $10.5 million for the same quarter last year, and its gross profit margin increased to 14.6 percent compared with 13.8 percent one year ago. Both the gross profit and margin improvement were attributable to steady demand across geographies in the West, says the company.

“Our growth expectations for 2017 and 2018 have increased, and our outlook continues to improve across our business,” says James Roberts, president and CEO of Granite Construction Inc. “We are particularly pleased with consistently strong margin performance in the construction segment and improving margins in the construction materials segment. We expect strong growth in both segments in the second half of 2017 and through 2018.”

Throughout all of its segments, Granite Construction reported net income of $14.1 million for the second quarter of 2017 compared with $14.2 million reported for the second quarter of 2016. Overall, the company posted second quarter consolidated revenue increases of 26.2 percent to $762.9 million compared with $604.6 million in the second quarter of 2016. On a year-to-date basis, consolidated revenue increased 17.9 percent to $1.23 billion in the first half of 2017, the company reports.

In addition, gross profit increased 1.9 percent to $74.6 million compared with $73.2 million last year. On a year-to-date basis, gross profit decreased 11.3 percent to $99.7 million in the first half of 2017. Gross profit margin was 9.8 percent in the second quarter of 2017 compared with 12.1 percent in the same time period in 2016. For the first half of 2017, gross profit margin was 8.1 percent compared with 10.8 percent last year.

According to Granite Construction, the company expects to see mid- to high-teens consolidated revenue growth, along with a consolidated EBITDA margin of 6 to 6.5 percent.

“Market conditions are changing across geographies and across end markets, and our business leaders have been tasked with raising their expectations in response to improved demand,” Roberts adds. “We see significant expansion in our markets, and it is incumbent upon us as a leader in our industry to raise our expectations for returns in all three segments of our business.

“As we enter the heart of our construction season, Granite teams are focused on solid safety performance and consistent execution of record backlog. We are extremely well positioned to benefit from steady private-market demand, as well as a significant uptick in key public transportation markets that is beginning this year and should continue for the foreseeable future.”