Granite Construction Q1 results: Revenue down 36 percent
Granite Construction today reported a net loss of $41.0 million, or $1.09 per diluted share, for the first quarter of 2010 compared with net income of $8.9 million, or $0.23 per diluted share, for the first quarter of 2009.
Below is a snapshot of the results, followed by a more detailed report:
- Revenue down 36 percent from a year ago
- Net loss of $41 million compared with net income of $8.9 million
- Backlog increased $177 million to $1.6 billion from year-end
- Balance sheet remains strong, with $299 million in cash and short-term marketable securities
“As we previously announced, throughout the quarter we continued to experience a challenging and competitive market environment in addition to extremely poor weather across the country,” said Granite President and Chief Executive Officer William G. Dorey in a press release from the company. “Although the first quarter is typically our weakest due to the seasonal nature of our business, this was one of the wettest first quarters we have experienced in quite some time.”
First-quarter 2010 financial results
Revenue totaled $220.7 million compared with $347.4 million in 2009, driven by weakness in demand and the impact of weather. First-quarter 2009 included approximately $46.0 million in revenue associated with work performed on the border fence project in the Southwest and $17.3 million related to a favorable settlement on a project in the East.
- Gross profit margin was 3 percent, down from 20 percent in 2009, driven primarily by a decline in revenue, no meaningful contract claim settlements and increased competition.
- Operating loss for the quarter was $45.1 million compared with operating income of $16.9 million in the prior year.
- Selling, general and administrative expenses for the first quarter were $55.3 million compared with $54.4 million for the same period last year. The first quarter of 2010 did not contain a bad-debt recovery compared with the first quarter of 2009, which included recovery of $2.9 million related to an account reserved in the prior year. First quarter 2010 expenses were also impacted by:
- $0.7 million increase in selling expenses, partially offset by a $2.1 million decrease in variable compensation expense
- $0.6 million related to severance costs associated with the Company’s restructuring
- Net income attributable to non-controlling interests in joint ventures was $3.2 million compared with $5.1 million in 2009.
- Total contract backlog at March 31, 2010, was $1.6 billion compared with $1.4 billion at December 31, 2009, and $1.6 billion at March 31, 2009.
- Construction revenue for the quarter totaled $81.2 million compared with $168.0 million for the same period in 2009. The decrease was affected by overall lower demand, weather and the lack of border fence work as compared to the prior year.
- Gross profit margin for the first quarter was 2 percent compared with 21 percent a year ago, partially due to the decline in revenue as well as profitability associated with border fence work.
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