WATSONVILLE - Granite Construction Incorporated (NYSE:GVA) has secured a contract worth approximately $38 million from the California Department of Transportation (Caltrans) to enhance the Highway 101 corridor in southern Santa Barbara. The project, known as Segment 4E South, involves the addition of High Occupancy Vehicle (HOV) lanes for peak-hour traffic and the reconstruction of the existing highway infrastructure.
This development marks the sixth Highway 101 mainline segment awarded to Granite under its Construction Manager/General Contractor (CMGC) contract, continuing a partnership with Caltrans and the Santa Barbara County Association of Governments (SBCAG) that has spanned over five years. The collaboration has yielded completed mainline segments in Carpinteria and Summerland, with another segment south of Summerland set for completion by year's end. Additional segments in Montecito are in progress, with an anticipated completion date in 2026.
The Segment 4E South contract aims to integrate seamlessly with the Montecito segments, improving project efficiency and leveraging synergies. Granite's approach to the project also places a strong emphasis on sustainability, with plans to recycle 13,000 tons of materials from existing facilities into aggregate base and produce 11,800 cubic yards of concrete for paving using an onsite batch plant. The materials for the concrete will be sourced from Granite's nearby aggregate facilities, totaling 19,000 tons, while Hot Mix Asphalt (HMA) will be supplied by Granite's Gardner and Santa Paula Hot Plants, amounting to 12,850 tons.
Granite Vice President of Regional Operations, Larry Camilleri, expressed enthusiasm for the project's role in reducing traffic congestion and improving the travel experience for the community.
Work on the Segment 4E South is expected to commence in September 2024, with a projected completion date in October 2026. The funding for this project will be sourced from Caltrans and local contributions, as accounted for in Granite's second-quarter CAP.
Granite, recognized as America's Infrastructure Company™, has been a major player in the construction and construction materials industry since 1922. With a commitment to ethical standards, safety, quality, and sustainability, Granite continues to be a leading firm in the United States civil construction sector.
This news is based on a press release statement.
In other recent news, Granite Construction Incorporated reported a robust second quarter, with a 22% increase in revenue within its Construction segment and an overall revenue surge of 20%. The company also noted a significant 60% rise in gross profit during this period. Additionally, Granite Construction announced the strategic acquisition of Dickerson & Bowen, which is expected to close in the third quarter and expand the company's Southeastern market presence.
The company's strong financial performance is supported by a $5.6 billion committed and awarded projects portfolio, indicating potential for continued organic growth. Granite Construction has also maintained its adjusted EBITDA margin guidance for 2024. As part of its future plans, the company intends to increase disclosures around the Materials business in 2025 for better financial visibility and provide future targets for 2025, 2026, and 2027 in the upcoming third quarter. These recent developments underscore Granite Construction's commitment to strategic growth and long-term planning.
InvestingPro Insights
As Granite Construction Incorporated (NYSE:GVA) gears up to enhance the Highway 101 corridor, the company's financial health and market performance provide a backdrop for the potential impact of this new contract on its operations. With a market capitalization of $3.11 billion and a robust revenue growth of 16.84% over the last twelve months as of Q2 2024, Granite appears to be on solid financial ground.
An InvestingPro Tip highlights that analysts have revised their earnings upwards for the upcoming period, reflecting optimism about Granite's future profitability. This is further supported by the company's PEG ratio of 0.53, indicating that its stock may be undervalued relative to its earnings growth prospects. Moreover, Granite has maintained dividend payments for 35 consecutive years, showcasing a commitment to returning value to shareholders.
InvestingPro Data also reveals that Granite is trading at a P/E ratio of 34.85, which adjusts to 32.48 when considering the last twelve months as of Q2 2024. This suggests that while the company is trading at a high earnings multiple, it may be justified by its near-term earnings growth. Additionally, Granite's liquid assets exceed its short-term obligations, indicating a healthy liquidity position that could support its operational needs for the Highway 101 project.
For readers interested in deeper analysis, there are 13 additional InvestingPro Tips available for Granite Construction, which can be found at https://www.investing.com/pro/GVA. These tips could provide further insights into the company's performance and potential investment opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.