EL PASO, TX - Granite Construction Incorporated (NYSE:GVA), a major player in the construction and construction materials industry with a market capitalization of $4.1 billion and impressive revenue growth of 17.8% over the last twelve months, has been awarded a significant contract by the United States Army Corps of Engineers. According to InvestingPro analysis, the company maintains a solid financial foundation with moderate debt levels and has demonstrated strong market performance with a 105% return over the past year. The contract, valued at approximately $71 million, is set to expand and enhance the rail yard at Fort Bliss, Texas.
The project, which is part of Granite’s third-quarter CAP for the year 2024, will be funded by federal sources. It entails the addition of new loading spurs, an expansion of the vehicle staging area, and the establishment of a secondary connection to the Union Pacific (NYSE:UNP) Railroad. These upgrades aim to increase the rail yard's capacity, streamline efficiency, and shorten the time required for rail loading operations.
Derek Betts, Granite Vice President of Regional Operations, remarked on the significance of the project for the company, highlighting its demonstration of Granite’s capabilities and the opportunities it presents for employee growth and strengthening of internal partnerships.
Curt Haldeman, another Vice President of Regional Operations at Granite, noted the project’s role in fostering strategic collaboration between the Federal Division and the Regions. He emphasized the benefits for regional employees to gain federal work experience and the company's intentions to expand its market presence in West Texas.
Construction on the rail yard is slated to start in February 2025 and is expected to reach completion by June 2027. This project adds to Granite's robust operational performance, which has earned the company a "GOOD" Financial Health score from InvestingPro. Investors can access detailed analysis and 12+ additional ProTips about Granite's financial outlook through InvestingPro's comprehensive research reports.
Founded in 1922, Granite has established itself as a leading and diversified construction and materials company in the U.S. Known for its commitment to ethical standards, safety, quality, and sustainability, Granite has been recognized with various industry awards. The company prides itself on its strong core values and adherence to a strict code of conduct. Notably, Granite has maintained dividend payments for 35 consecutive years, demonstrating long-term financial stability. InvestingPro subscribers can access detailed financial metrics, peer comparisons, and expert analysis through the platform's exclusive Pro Research Reports, available for over 1,400 US stocks including GVA.
This development is based on a press release statement and does not include any promotional content or endorsements. The information provided is intended to offer a factual update on Granite’s latest contract and its potential implications for the company's operations and growth.
In other recent news, Northern Oil and Gas has reportedly made multiple acquisition offers for Granite Ridge Resources, a smaller U.S. producer operating in basins such as the Permian and Eagle Ford (NYSE:F). Despite an offer approximately 20% higher than Granite Ridge's share price, the management of the latter has declined Northern's advances. However, Northern remains interested and may increase its offer in the future. Both companies have chosen not to comment on the matter.
In parallel developments, Granite Construction Incorporated reported a 14% year-over-year increase in revenue to $1.1 billion for Q3 2024. The company's backlog rose to $5.6 billion, a $44 million increase, and anticipates organic revenue growth of 6% to 8% annually through 2027. Adjusted EBITDA margin is expected to reach 12%-14% by 2027. The company also detailed its plans for strategic acquisitions and maintaining a strong cash position for investments and shareholder returns. Despite these positive developments, Granite Construction noted project delays that could impact future quarters.
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