How Granite Construction fared in third quarter 2019

Roberts

Granite Construction reported net income of $20.5 million in the third quarter, a mark that’s down significantly from the company’s 2018 third quarter.

Granite reported a 2018 third-quarter net income of $55.7 million.

On a year-to-date basis, the company’s net loss is $111.9 million compared to a net income of $35.9 million last year.

“During the third quarter, strong core operational performance was dampened by a negative contribution from the heavy civil operating group primarily driven by disputed work,” says James H. Roberts, president and CEO at Granite. “Our core businesses capitalized on good weather this quarter combined with well-funded infrastructure markets.

“As we restore balance in heavy civil, a critical piece of the puzzle is resolution of ongoing disputes which continue to have a distorted impact on our cash flows and earnings,” Roberts adds.

Materials performance

In materials, Granite’s third-quarter revenue ($129.1 million) was on par with its 2018 third quarter ($129.6 million). The company’s year-to-date 2019 revenue was $268.4 million, compared to $276.3 million last year.

The year-to-date decline is attributable to inclement weather across the western United States through May, the company says.

Third-quarter gross profit was $24.5 million – compared to $21.3 million last year – with a gross profit margin of 19 percent. That’s up from 16.4 percent from 2018.

Granite’s year-to-date gross profit in materials is $34.7 million, compared to $36.3 million last year.

Looking ahead

“Current operational momentum, robust market dynamics and our strong CAP combined with favorable weather patterns the rest of this year should allow our businesses to deliver positive results well into the fourth quarter,” Roberts says. “As we look ahead, these positive dynamics have us well positioned for 2020.”