Why Granite Construction finished last year strong

By |  February 17, 2018

Granite Construction reports that its construction materials revenue increased 12.1 percent in 2017 to $292.8 million.

The jump was largely due to increased demand across the company’s markets, as well as modest price increases.

Additionally, Granite’s gross profit margin last year in construction materials was 13 percent, as overall public market demand improved. Profitability was impacted positively late in the year, as steady demand and mild late-2017 weather allowed Granite to work later and more efficiently than in 2016.

“The construction segment in 2017 produced a third consecutive year with gross profit margin in line with our mid-teens expectations, and a strong year-end performance enabled our construction materials segment to deliver solid quarterly and annual profit and margin improvement,” says James Roberts, president and CEO of Granite. “As we have seen for much of the past couple years, the large project construction segment was the most challenging, but we expect significant improvement in the back half of 2018.”

Roberts

In the fourth quarter of 2017, Granite’s construction materials revenue increased 33 percent to $80.9 million. The combination of strong market conditions along with mild late-2017 weather in the West drove revenue growth.

Granite’s gross profit margin for the fourth quarter was 18.7 percent.

“A mild start to winter across much of the West allowed our teams to work efficiently to execute on last quarter’s all-time record backlog,” Roberts says. “With today’s steady economic trends and steady-to-improving funding environments, along with our ongoing focus on operating efficiency, we expect to continue to drive strong cash flow generation and help deliver significant profit improvement in 2018 and beyond.

“With voters and legislators making a concerted push for generational commitments to infrastructure investment at the state, regional, and local level, we are only now seeing the early benefits of the long-term public infrastructure funding commitments that were made last year,” Roberts adds.

Kevin Yanik

About the Author:

Kevin Yanik is the editor-in-chief of Pit & Quarry magazine. Yanik can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

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