Granite reports full-year, Q4 2010 results
- Construction materials revenue for the full year totaled $222.1 million compared with $205.9 million for the same period last year.
- Gross profit margin on the sale of construction materials was 5 percent in 2010, compared with 10 percent in 2009. The decrease is primarily attributable to an increase in fixed costs associated with two new materials processing facilities that came online in late 2009.
Fourth-quarter 2010 financial results
- Revenues for the quarter totaled $417.2 million, compared with $434.7 million in 2009.
- Gross profit margin decreased to 11 percent, down from 21 percent in 2009.
- Operating loss for the quarter was $98.5 million, compared with operating income of $35.6 million in the prior year. The fourth quarter 2010 includes restructuring charges of $107.3 million related to workforce reductions as well as real estate and fixed asset impairment charges.
- Selling, general and administrative expenses decreased $16.7 million quarter over quarter to $39.8 million.
- Amount attributable to noncontrolling interests was a loss of $15.4 million, compared with income of $11.0 million in 2009 due to $20.0 million associated with the impairment charges taken in the fourth quarter 2010.
- Construction revenues for the quarter totaled $214.1 million, compared with $239.6 million for the same period in 2009.
- Gross profit margin for the fourth quarter was 12 percent compared with 20 percent for the same period last year. The decrease was affected by overall lower demand and lower margins due to the competitive environment.
Large project construction
- Large project construction revenues for the quarter totaled $154.8 million, compared with $147.5 million for the same period in 2009.
- Gross profit margin for the fourth quarter was 11 percent, compared with 26 percent for the same period last year, reflecting an increase in revenue on projects that have yet to reach the profit recognition threshold.
- Construction materials revenue for the quarter totaled $46.7 million, compared with $47.3 million for the same period in 2009.
- Gross profit on the sale of construction materials was 5 percent, compared with 8 percent for the same period in 2009.
“The actions we are taking to reduce our cost structure are expected to lead to a substantial improvement in our bottom line results in 2011,” Roberts said. “In addition, we anticipate a positive impact to earnings from some large projects reaching the profit recognition threshold. While the pipeline of large project bidding opportunities remains full, our goal is to build high quality backlog that will provide the best return for our shareholders. The large project construction market offers a great deal of near-term growth potential for our business and we are excited about the opportunities that this segment of our business will provide.”
Roberts said Granite’s construction segment is starting 2011 with a healthy backlog of work. However, he anticipates the competitive environment will remain very tough.
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