GVA - Why Shares of Granite Construction Are Crumbling Today
Shares of Granite Construction (NYSE: GVA) lost more than 35% of their value on Friday morning after the general contractor and construction materials provider reported quarterly results that fell well below expectations. Issues with the company's heavy civil construction unit continue to plague the stock, which has now lost nearly half of its value this year.
Before markets opened on Friday, Granite reported third quarter adjusted earnings of $0.58 per share on revenue of $1.1 billion, falling well short of analyst expectations for $1.44 per share in earnings and missing revenue estimates by about $60 million. CEO James H. Roberts said in a statement that overall business conditions in the quarter were strong, aided by good weather and solid public-sector infrastructure funding, but contract disputes in Granite's heavy civil division weighed on performance.
"During the third quarter, strong core operational performance was dampened by a negative contribution from the heavy civil operating group primarily driven by disputed work," Roberts said. "As we restore balance in heavy civil, a critical piece of the puzzle is resolution of ongoing disputes which continue to have a distorted impact on our cash flows and earnings."