Granite(GVA)

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Here Is Why Bargain Hunters Would Love Fast-paced Mover Granite Construction (GVA)
ZACKS· 2024-11-04 14:50
Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potenti ...
Granite(GVA) - 2024 Q3 - Earnings Call Transcript
2024-10-31 20:49
Financial Data and Key Metrics Changes - Revenue increased by $159 million or 14% year-over-year, reaching $1.1 billion in Q3 2024, driven by higher levels of backlog [43][44] - Gross profit rose by $36 million or 22%, with an adjusted EBITDA improvement of $23 million or 18% [43][44] - Operating cash flow improved significantly by $249 million year-over-year, totaling $284 million for the first nine months of 2024 [47][48] Business Line Data and Key Metrics Changes - In the construction segment, revenue totaled $1.1 billion, reflecting a 14% increase year-over-year, with gross profit margin at 16% [32][44] - The materials segment saw revenue increase by $24 million year-over-year to $195 million, with gross profit up to $32 million [46] - Cash gross profit margins in the materials segment remained strong at 22%, driven by price increases and newly acquired businesses [46] Market Data and Key Metrics Changes - The company reported strong performance across its geographies, particularly in California, Alaska, and Utah [44] - Public funding supports approximately 75% of construction revenue, with expectations for continued growth in both public and private sectors [16][17] - The company anticipates organic revenue growth at a compounded annual growth rate of 6% to 8% through 2027 [19][74] Company Strategy and Development Direction - The company aims to grow revenue and increase margins in both construction and materials segments, with a focus on de-risking its project portfolio and expanding geographically [10][12] - A strategic investment in automation and other projects is expected to drive production costs down and improve margins in the materials segment [26] - The company plans to pursue bolt-on acquisitions and geographical expansion to strengthen its market position [20][21] Management's Comments on Operating Environment and Future Outlook - Management expects the public markets to remain strong, supported by ongoing infrastructure funding from the IIJA [13][14] - The company is optimistic about future revenue growth despite some project delays, which are not unusual in the industry [32][70] - There is confidence in achieving further margin improvements in 2025, driven by a strong project pipeline and operational excellence [56][93] Other Important Information - The company has a strong cash position of $472 million, allowing for potential acquisitions and share repurchases [49][50] - Capital expenditures for the year are expected to be approximately $139 million, with a focus on maintaining discipline in spending [53] - The company narrowed its adjusted EBITDA margin guidance to 10% to 11% for 2024 [52] Q&A Session Summary Question: Long-term outlook on EBITDA margin expansion - Management indicated that the primary driver for EBITDA margin improvement will be the construction segment, with expectations for a ramp-up in Q4 and into 2025 [61][62] Question: Causes of project delays into 2025 - Delays were attributed to owner-driven factors, including notice to proceed delays and changes in conditions [69][70] Question: Organic revenue growth rate and market dynamics - The company expects a 6% to 8% organic revenue growth rate, with more confidence in the public market compared to the private sector [72][74] Question: Capital allocation strategy regarding acquisitions and share repurchases - The company plans to balance investments in M&A and share repurchases, with a focus on maintaining a strong cash position [75][79] Question: Pricing expectations for aggregates and asphalt - The company anticipates high single-digit price increases for aggregates and low single-digit increases for asphalt in 2025, supported by strong public market visibility [86]
Granite(GVA) - 2024 Q3 - Quarterly Results
2024-10-31 10:46
[Financial Performance Overview](index=1&type=section&id=Granite%20Reports%20Third%20Quarter%202024%20Results) [Third Quarter 2024 Results](index=1&type=section&id=Third%20Quarter%202024%20Results) Granite reported strong third-quarter 2024 results with a 14% year-over-year revenue increase to $1.3 billion, with net income and earnings per share seeing significant growth, and record Committed and Awarded Projects (CAP) of $5.6 billion Q3 2024 Key Financial Metrics | Metric | Q3 2024 | Q3 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $1.3 billion | $1.1 billion | +14% YoY | | **Net Income** | $79 million | $58 million | +36.2% YoY | | **Diluted EPS** | $1.57 | $1.13 | +38.9% YoY | | **Adjusted Net Income** | $91 million | $77 million | +18.2% YoY | | **Adjusted Diluted EPS** | $2.05 | $1.72 | +19.2% YoY | | **Gross Profit** | $203 million | $167 million | +21.6% YoY | | **Adjusted EBITDA** | $149 million | $126 million | +18.3% YoY | - Committed and Awarded Projects (CAP) reached a record **$5.6 billion**, showing a sequential increase of **$44 million** and a year-over-year increase of **$35 million**[1](index=1&type=chunk)[3](index=3&type=chunk) - The company expanded its southeast home market through the acquisition of Dickerson & Bowen, Inc[1](index=1&type=chunk) [Nine Months 2024 Results](index=1&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202024%20Results) For the first nine months of 2024, Granite's revenue grew by $455 million to $3.0 billion, with net income surging to $85 million, a substantial increase from $18 million in the prior-year period Nine Months 2024 Key Financial Metrics | Metric | Nine Months 2024 | Nine Months 2023 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $3.0 billion | $2.6 billion | +17.5% YoY | | **Net Income** | $85 million | $18 million | +372.2% YoY | | **Diluted EPS** | $1.79 | $0.40 | +347.5% YoY | | **Adjusted Net Income** | $158 million | $110 million | +43.6% YoY | | **Adjusted Diluted EPS** | $3.56 | $2.47 | +44.1% YoY | | **Gross Profit** | $422 million | $302 million | +39.7% YoY | | **Adjusted EBITDA** | $293 million | $204 million | +43.6% YoY | - Year-to-date operating cash flow increased by **$249 million** compared to the same period in the prior year[1](index=1&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Construction Segment](index=2&type=section&id=Construction%20Segment) The Construction segment delivered strong year-over-year growth in both the third quarter and the first nine months of 2024, driven by higher CAP levels, favorable weather, and contributions from acquisitions, with gross profit margin also expanding Construction Segment Performance (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $1,080,705 | $945,698 | $2,593,872 | $2,198,527 | | **Gross Profit** | $170,685 | $137,162 | $362,885 | $253,021 | | **Gross Profit Margin** | 15.8% | 14.5% | 14.0% | 11.5% | - Committed and Awarded Projects (CAP) increased to a record **$5.6 billion**, providing a strong foundation for future revenue[7](index=7&type=chunk) [Materials Segment](index=2&type=section&id=Materials%20Segment) The Materials segment reported revenue growth of 13.8% in Q3 and 15.8% year-to-date, primarily due to contributions from acquired businesses and higher asphalt and aggregate sales prices, reflecting the positive impact of acquisitions and pricing power Materials Segment Performance (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $194,805 | $171,122 | $436,399 | $376,913 | | **Gross Profit** | $32,264 | $29,481 | $59,060 | $49,067 | | **Gross Profit Margin** | 16.6% | 17.2% | 13.5% | 13.0% | | **Cash Gross Profit** | $43,202 | $36,203 | $89,718 | $67,581 | - Revenue growth was driven by acquired businesses and higher sales prices, which successfully offset a decrease in asphalt volumes[8](index=8&type=chunk) [Outlook and Strategy](index=1&type=section&id=Outlook%20and%20Strategy) [2024 Full-Year Guidance](index=3&type=section&id=2024%20Full-Year%20Guidance) Granite updated its full-year 2024 guidance, maintaining its revenue forecast while narrowing and raising the adjusted EBITDA margin range to 10%-11%, and increasing its SG&A expense forecast due to higher incentive compensation Updated 2024 Full-Year Guidance | Metric | Updated 2024 Guidance | Previous 2024 Guidance | | :--- | :--- | :--- | | **Revenue** | $3.9B - $4.0B | Unchanged | | **Adjusted EBITDA Margin** | 10% - 11% | 9.5% - 11.5% | | **SG&A as % of Revenue** | 8.3% - 8.5% | 7.5% - 8.0% | | **Effective Tax Rate (Adjusted)** | Mid-20s | Not specified | | **Capital Expenditures** | ~$130 million | Not specified | [Long-Term Targets and Market View](index=1&type=section&id=Long-Term%20Targets%20and%20Market%20View) The CEO expressed a positive long-term outlook, targeting organic growth of 6-8% CAGR through 2027, supported by the federal infrastructure bill and a healthy private market, with plans for materials-focused acquisitions and share repurchases - The company's 2027 financial targets anticipate organic revenue growth at a CAGR of **6% to 8%**, with continued adjusted EBITDA margin expansion[3](index=3&type=chunk) - Management believes the public market will be supported for years by the federal infrastructure bill and sees numerous growth opportunities in the private market[3](index=3&type=chunk) - Future capital allocation strategy includes pursuing bolt-on and larger materials-focused acquisitions and returning value to shareholders through share repurchases[3](index=3&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, Granite's balance sheet showed total assets of $3.13 billion, an increase from $2.81 billion at the end of 2023, supported by increases in cash, receivables, and goodwill, while total liabilities also rose and total equity saw a modest increase Key Balance Sheet Items (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $1,814,102 | $1,643,451 | | **Total Assets** | $3,130,925 | $2,813,540 | | **Total Current Liabilities** | $1,164,826 | $1,029,883 | | **Total Liabilities** | $2,061,246 | $1,786,574 | | **Total Equity** | $1,069,679 | $1,026,966 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations for the third quarter and first nine months of 2024 reflects strong top-line growth translating to significantly improved profitability, with total revenue increasing to $3.03 billion and net income attributable to Granite surging to $84.9 million for the nine months ended September 30, 2024 Key Income Statement Items (in thousands) | Account | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,275,510 | $1,116,820 | $3,030,271 | $2,575,440 | | **Gross Profit** | $202,949 | $166,643 | $421,945 | $302,088 | | **Operating Income** | $104,298 | $73,818 | $146,819 | $59,429 | | **Net Income Attributable to Granite** | $78,951 | $57,624 | $84,863 | $17,601 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash provided by operating activities was $283.5 million, a significant improvement from the prior-year period, while investing activities used $211.1 million and financing activities used $27.8 million, resulting in a $44.6 million increase in cash and cash equivalents Cash Flow Summary - Nine Months Ended Sep 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $283,549 | $34,198 | | **Net Cash used in Investing Activities** | ($211,107) | ($89,270) | | **Net Cash provided by (used in) Financing Activities** | ($27,819) | $53,205 | | **Net Increase (Decrease) in Cash** | $44,623 | ($1,867) | | **Cash and Cash Equivalents at End of Period** | $462,286 | $292,124 | [Non-GAAP Financial Measures Reconciliation](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) [EBITDA and Adjusted EBITDA Reconciliation](index=11&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) The company's non-GAAP measures show strong underlying performance, with Adjusted EBITDA increasing to $149.3 million in Q3 2024 and the margin improving to 11.7%, while for the nine-month period, Adjusted EBITDA grew to $293.2 million EBITDA and Adjusted EBITDA (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net Income Attributable to Granite** | $78,951 | $57,624 | $84,863 | $17,601 | | **EBITDA** | $138,768 | $104,542 | $218,541 | $105,913 | | **Adjusted EBITDA** | $149,280 | $126,313 | $293,196 | $203,568 | | **Adjusted EBITDA Margin** | 11.7% | 11.3% | 9.7% | 7.9% | [Adjusted Net Income Reconciliation](index=12&type=section&id=Adjusted%20Net%20Income%20Reconciliation) After adjustments, Granite's adjusted net income for Q3 2024 was $90.5 million, or $2.05 per diluted share, compared to $76.7 million, or $1.72 per diluted share, in Q3 2023, with adjusted diluted EPS for the nine-month period reaching $3.56 Adjusted Net Income and EPS | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **GAAP Net Income (in thousands)** | $78,951 | $57,624 | $84,863 | $17,601 | | **Adjusted Net Income (in thousands)** | $90,535 | $76,654 | $158,303 | $109,724 | | **GAAP Diluted EPS** | $1.57 | $1.13 | $1.79 | $0.40 | | **Adjusted Diluted EPS** | $2.05 | $1.72 | $3.56 | $2.47 | [Materials Segment Cash Gross Profit Reconciliation](index=13&type=section&id=Materials%20Segment%20Cash%20Gross%20Profit%20Reconciliation) The Materials segment's cash gross profit, a non-GAAP measure, was $43.2 million in Q3 2024, up from $36.2 million in Q3 2023, with the cash gross profit margin improving to 22.2% from 21.2%, indicating stronger operational profitability before non-cash charges Materials Segment Cash Gross Profit (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Gross Profit** | $32,264 | $29,481 | $59,060 | $49,067 | | **Depreciation, Depletion & Amortization** | $10,938 | $6,722 | $30,658 | $18,514 | | **Cash Gross Profit** | $43,202 | $36,203 | $89,718 | $67,581 | | **Cash Gross Profit Margin** | 22.2% | 21.2% | 20.6% | 17.9% |
Granite Construction: Still Cruising Higher
Seeking Alpha· 2024-10-28 15:38
One of my better calls over the last year or so has been Granite Construction (NYSE: GVA ), a company that focuses on the construction and rehabilitation of roads, bridges, rail lines, airports, and more. It is also involved in Crude Value Insights offers you an investing service and community focused on oil and natural gas. We focus on cash flow and the companies that generate it, leading to value and growth prospects with real potential. Subscribers get to use a 50+ stock model account, in-depth cash flow ...
Granite Secures $34M Contract to Improve OAK Perimeter Dike
ZACKS· 2024-10-09 17:32
Granite Construction Incorporated (GVA) won a $34 million contract to implement seismic improvements at the Oakland International Airport (OAK) Perimeter Dike. This vital infrastructure project aims to protect the airport's runway from potential water intrusion from the nearby San Francisco Bay. Partial funding is provided by the Federal Aviation Administration, and the project will be recorded in Granite's third-quarter CAP. The upgrade will focus on strengthening 4,200 linear feet of the dike using cement ...
Granite Secures $113M Marine Corps Contract, Stock Gains
ZACKS· 2024-09-25 16:50
Granite Construction Incorporated (GVA) secured a significant contract valued at approximately $113 million for constructing new facilities at Marine Corps Base Camp Blaz (MCCB). The construction will be carried out in partnership with Obayashi Corporation through the Granite-Obayashi 2 Joint Venture. GVA stock moved up 0.5% during the trading session on Sept. 24. Key Project Highlights This project will be funded by the Department of Defense's (DOD) Military Construction (MILCON) program and will be includ ...
Are You Looking for a Top Momentum Pick? Why Granite Construction (GVA) is a Great Choice
ZACKS· 2024-09-20 17:06
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades. Eve ...
Fast-paced Momentum Stock Granite Construction (GVA) Is Still Trading at a Bargain
ZACKS· 2024-09-20 13:51
Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time. Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potent ...
Granite Stock Gains With $65M Utah Road Improvement Contract
ZACKS· 2024-09-11 16:30
Granite Construction Incorporated (GVA) recently announced a win with the Utah Department of Transportation ("UDOT"), securing a $65 million contract for Phase 2 of the SR-30 Improvement Project in Logan, UT. This deal builds on Granite's successful completion of Phase 1 in 2023, positioning the company as the preferred low bidder for the next phase of the project. GVA stock gained 0.7% during the trading session on Sept. 10. Boost to Granite's Stock Value This contract, funded by UDOT and federal sources, ...
Granite (GVA) Wins $38M CMGC Contract for Highway 101 Expansion
ZACKS· 2024-08-23 16:10
Granite Construction Incorporated (GVA) secured a $38-million contract from the California Department of Transportation (Caltrans) for the Highway 101 mainline segment. This contract involves adding peak-hour High Occupancy Vehicle (HOV) lanes and reconstructing the highway in southern Santa Barbara. The project, funded by Caltrans and local sources, was included in GVA's second-quarter Committed and Awarded Projects (CAP). The latest Highway 101 mainline segment marks Granite's sixth project under its Cons ...