WATSONVILLE, Calif. - Granite Construction Incorporated (NYSE:GVA) and its joint venture partner Kraemer North America have been awarded a $113 million contract by the Michigan Department of Transportation (MDOT) to replace the Lafayette Bascule Bridge in Michigan, the company announced. This federal and state-funded project is set to begin in Fall 2024 and is slated for completion in Summer 2027.
The GKJV-II joint venture will oversee the removal of the current bridge and construct a new one, drawing on their expertise in movable bridge and marine construction. The scope of work includes the demolition of the existing bridge, the installation of a cofferdam, construction of new substructures and bascule piers, as well as the erection of structural steel, machinery, a bridge house, and approach spans.
Michael Punches, Granite's Vice President of Regional Operations, highlighted the significance of this project as the third bascule bridge endeavor in Bay City, Michigan for the team. He expressed enthusiasm about partnering with MDOT for the first time, emphasizing the joint venture's commitment to enhancing local infrastructure and improving the quality of life for the community.
The financial impact of the contract will be reflected in Granite's second-quarter CAP, indicating the project's contribution to the company's performance metrics.
Granite, self-styled as America's Infrastructure Company™, has been a prominent player in the construction and construction materials industry since 1922. The company is recognized for its adherence to ethical standards, safety leadership, quality achievements, and commitment to sustainability.
This news is based on a press release statement.
In other recent news, Granite Construction Incorporated has announced a series of significant developments. The company has revealed plans for a $325 million convertible senior notes offering, which is subject to market conditions.
The proceeds from this offering are intended to fund various corporate purposes, including capped call transactions, repurchasing some of Granite's 2.75% convertible senior notes due in 2024, and repaying amounts under its term loan.
In addition to this, Granite reported an 18% increase in construction revenue and a $20 million increase in the materials segment's revenue in its first-quarter earnings call. The company has also secured several major contracts, including a $48 million eco-friendly project in Washington, an $89 million subcontract for a transformation project at Houston Airport, and a $25 million infrastructure retrofit at Ontario International Airport.
Furthermore, Granite announced a leadership transition with the retirement of CFO Lisa Curtis as of September 16, 2024. Staci Woolsey, currently serving as Chief Accounting Officer, will succeed Curtis, overseeing all global financial functions of the company. These developments reflect Granite's strategic focus on diversification and growth in the construction sector.
InvestingPro Insights
Granite Construction Incorporated (NYSE:GVA) has recently secured a significant contract which is expected to positively impact their financial metrics in the coming years. In light of this development, let's delve into some key insights from InvestingPro that could provide a deeper understanding of the company's financial health and market performance.
As per InvestingPro, analysts are optimistic about Granite's profitability, forecasting an uptick in net income for the current year. This aligns with the company's recent contract win, potentially signaling strong future earnings. Moreover, Granite's ability to maintain dividend payments for an impressive 35 consecutive years speaks to its financial stability and commitment to shareholder returns.
From a market perspective, Granite's stock is known to exhibit low price volatility, which might appeal to investors looking for steadier returns in the construction sector. However, the company is trading at a high earnings multiple, with a P/E ratio of 38.17 based on the last twelve months as of Q1 2024, suggesting a premium market valuation.
InvestingPro also highlights that Granite's liquid assets surpass its short-term obligations, indicating a healthy liquidity position that could support its operational needs and investment in new projects like the Lafayette Bascule Bridge replacement.
For those interested in delving deeper into Granite's financials and market performance, InvestingPro offers additional tips and insights. Currently, there are 9 more InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/GVA. To enhance your experience, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
The insights provided here are a snapshot of Granite's financial landscape, and the additional tips on InvestingPro could further enrich investors' understanding as they consider the company's future prospects in light of its latest contract award.
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