WATSONVILLE, Calif. - Granite Construction Incorporated (NYSE:GVA) has secured a contract worth approximately $21 million from the California Department of Transportation (Caltrans) for the rehabilitation of a stretch of State Route 99 (SR 99) in Tulare, California. The project, which is expected to begin in November 2024, involves the refurbishment of three miles of the highway and is funded by federal sources.
The contract outlines a comprehensive overhaul of both the northbound and southbound lanes, including the removal of the existing pavement by cold planing. The company plans to lay down 56,300 tons of hot mix asphalt (HMA) and a top layer of 7,200 tons of rubberized hot mix asphalt (RHMA). Additionally, thirteen ramps along the route will be repaved, and 2,500 cubic yards of jointed plain concrete pavement will replace concrete pavement at ten undercrossings.
Granite's work on SR 99 will also encompass significant drainage improvements, the installation of new roadside signage, and fresh striping. The median will see the replacement of nearly 32,000 linear feet of thrie beam barrier. Moreover, the project includes substantial electrical upgrades for the highway, such as ramp metering systems, camera systems, highway lighting, and traffic monitoring stations.
Carter Rohrbough, Granite Vice President of Regional Operations, highlighted the company's history of successful projects with Caltrans District 6 and expressed enthusiasm for providing quality work to the Central Valley community once again. The project is set to be completed by May 2026 and will provide early season work for local crews, reinforcing Granite's presence in Tulare County.
Granite, known as America's Infrastructure Company™, has been a major player in construction and construction materials since 1922. The company prides itself on its ethical standards, safety leadership, and commitment to quality and sustainability. The information for this project is based on a press release statement.
In other recent news, Granite Construction Incorporated has achieved notable strides in its operations. The company has secured several major contracts, including a $34 million project for seismic upgrades at Oakland International Airport, a $113 million contract for new construction at Marine Corps Base Camp Blaz in a joint venture with Obayashi Corporation, and a $65 million contract for the SR-30 Improvement Project with the Utah Department of Transportation.
Furthermore, Granite has been awarded a $45 million contract for the upgrade of the John Wilkie Safety Roadside Rest Area on Interstate 40, and a $38 million contract to enhance the Highway 101 corridor in southern Santa Barbara. The company has also announced the strategic acquisition of Dickerson & Bowen, expected to close in the third quarter.
In executive-level changes, Granite has appointed Ms. Woolsey as the new CFO, while entering into a Separation and Transition Agreement with the outgoing CFO, Ms. Curtis.
The company reported a robust second quarter, with a 22% increase in revenue within its Construction segment and a 60% rise in gross profit. These recent developments are supported by a $5.6 billion committed and awarded projects portfolio. As part of its future plans, Granite 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.
InvestingPro Insights
Granite Construction's recent $21 million contract win from Caltrans aligns well with the company's strong financial performance and market position. According to InvestingPro data, Granite's revenue growth has been impressive, with a 16.84% increase over the last twelve months as of Q2 2024, and an even more robust 20.47% growth in the most recent quarter. This new project is likely to contribute positively to this growth trend.
InvestingPro Tips highlight that Granite's net income is expected to grow this year, which could be partly driven by projects like the SR 99 rehabilitation. The company's ability to secure such contracts may be a factor in why two analysts have revised their earnings upwards for the upcoming period.
Interestingly, while Granite is trading at a high earnings multiple with a P/E ratio of 40.56, it's also trading at a low P/E ratio relative to near-term earnings growth, as indicated by a PEG ratio of 0.62. This suggests that the market may be pricing in strong future growth prospects, possibly influenced by the company's robust project pipeline and execution capabilities.
For investors interested in a deeper analysis, InvestingPro offers 16 additional tips for Granite Construction, providing a comprehensive view of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.