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Granite Construction Incorporated (NYSE: GVA) today reported a net loss of $20.6 million for the quarter ended March 31, 2014, compared to a loss of $22.0 million in the first quarter of 2013. Diluted earnings per share in the quarter were a loss of $0.53 compared to a loss of $0.57 in the prior-year period. First quarter 2014 results include the impact of a discrete tax charge of $1.6 million related to tax law changes in the State of New York. Excluding the impact of this discrete tax charge, Granite’s non-GAAP
2 results were a loss of $18.9 million, or $0.49 per share.
“Our teams continue to focus on the many opportunities we have to grow the business this year by executing on Granite’s strategic plan,” said James H. Roberts, President and CEO of Granite Construction Incorporated. “We are seeing signs of private market recovery, and the bidding environment, especially in large projects, remains robust. We are very pleased the Granite joint venture team was announced last week as the successful bidder on the $2.3 billion I-4 Ultimate project in Florida. However, inaction by Congress to adequately fund America’s infrastructure could slow down the recovery we are beginning to experience.
“In being named one of the World’s Most Ethical Companies, Granite is one of only three companies in the construction industry – and the only U.S.-based construction company – honored this year. Receiving this award for the fifth consecutive year is a testament to the Code of Conduct that is pervasive inside our offices and on our jobsites today,” Roberts said.
First Quarter 2014 ResultsTotal Company
Revenue for the first quarter of 2014 increased slightly to $379.8 million compared with $378.7 million last year.
Gross profit margin in the first quarter was 5.6 percent compared with 7.9 percent in 2013, driven mostly by project timing in the Large Project Construction segment portfolio, coupled with a decrease in Construction segment gross profit and improved Construction Materials segment performance.
SG&A expenses for the first quarter of 2014 decreased $7.9 million to $49.2 million partially reflecting a decrease in pre-bid costs and non-recurring first quarter 2013 Kenny Construction integration-related costs.
Construction revenue in the first quarter of 2014 decreased 11.3 percent to $157.0 million, compared with $177.1 million last year. The decrease was the result of a change in the mix of power projects to the Large Projects Construction segment. In addition, revenue opportunities were lost due to weather impacts in certain markets, particularly Chicago.
Gross profit margin was 5.8 percent, compared with 7.5 percent a year ago, driven by the revenue decrease and by weather. These seasonal factors, typical during the first quarter, are expected to abate as we build work and add backlog across the portfolio.
Large Project Construction
Large Project Construction revenue in the first quarter of 2014 increased 9.1 percent to $187.3 million, compared with $171.7 million last year. The increase was a result of project timing and inclusion of a portion of power revenues.
Gross profit margin for the quarter was 8.4 percent, compared with 13.2 percent in 2013. Gross profit performance, as expected, reflects timing of projects in the portfolio that will not reach profit recognition thresholds until later in the year.
Construction Materials revenue in the first quarter of 2014 increased 19.2 percent to $35.4 million, compared with $29.8 million last year.
Gross loss on the sale of construction materials was $3.6 million, a more than 40 percent improvement from a loss of $6.0 million in the first quarter of 2013. The revenue increase and margin improvement resulted from increased volume attributable to a recovering private sector and stronger fundamentals in the public works market.
Outlook and Guidance
“We continue to have an optimistic outlook on both a near-term and a long-term basis. Backlog and bidding trends point to improvement in both public and private markets,” Roberts said.