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Category: Stock Market and Great Lakes Dredge
Date: 7 November 2019 Stock Price: $9.66 We take a look at the 3rd quarter earnings release of their 2019 fiscal year of Great Lakes Dredge & Dock, the largest provider of dredging services in the United States with over 200 specialised vessels.
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About Great Lakes Dredge & Dock
Great Lakes Dredge & Dock Corporation (“Great Lakes” or the “Company”) is the largest provider of dredging services in the United States and the only U.S. dredging company with significant international operations. The Company employs experienced civil, ocean and mechanical engineering staff in its estimating, production and project management functions. In its over 129-year history, the Company has never failed to complete a marine project. Great Lakes owns and operates the largest and most diverse fleet in the U.S. dredging industry, comprised of over 200 specialized vessels. Great Lakes has a disciplined training program for engineers that ensures experienced-based performance as they advance through Company operations. The Company’s Incident-and Injury-Free (IIF®) safety management program is integrated into all aspects of the Company’s culture. The Company’s commitment to the IIF® culture promotes a work environment where employee safety is paramount.
Overview of Great Lakes Dredge & Dock's 3rd quarter 2019 earnings report
The data below refers to the most recent quarter unless specified otherwise
- Contract revenues: $169.775 million (down from $178.671 million from the same quarter of the previous year)
- Contract revenues decreased by -4.9% over the last 12 months
- Gross profit: $31.833 million (down from $39.584 million for the same quarter of the previous year)
- Net income: $7.952 million (down from $11.702 million for the same quarter of the previous year)
- Diluted earnings per share: $0.12 (down from $0.19 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 65.071 million (up from 63.260 million for the same quarter of the previous year)
- Cash and cash equivalents: $180.855 million
- Cash and cash equivalents per share: $2.77
- Cash and cash equivalents makes up 28.7% of Great Lakes Dredge & Dock's market capital
- Cash and cash equivalents makes up 20.3% of Great Lakes Dredge & Dock' total assets
- Stockholders equity for Great Lakes Dredge & Dock: $261.824 million
- Stockholders equity per share: $4.02
- Great Lakes Dredge & Dock is trading at 2.4 times its stockholders equity which is within the expected range of between 2 and 4 times that most firms tend to trade at.
Great Lakes' management commentary on their 3rd quarter 2019 earnings and guidance
OAK BROOK, Ill., Nov. 05, 2019 (GLOBE NEWSWIRE) — Great Lakes Dredge & Dock Corporation (Nasdaq:GLDD), the largest provider of dredging services in the United States, today reported financial results for the quarter ended September 30, 2019.
Chief Executive Officer Lasse Petterson commented, “Bidding activity increased significantly, with over $1.0 billion in projects bid in the third quarter. The third quarter reflects solid project performance which produced results in line with our expectations. Operationally, the quarter had lower dredging activity, due to several vessel dry dockings. Most of these dry dockings are now complete and those vessels are actively engaged on projects in the fourth quarter. The impact was partially offset by improved performance on the San Jacinto flood prevention project in Houston, Texas and the Jacksonville port deepening project in Florida. Strong performance is also a result of safe project execution as we continue to focus on improving safety on our projects.
As stated previously, the third quarter had over $1 billion in projects bid. Great Lakes was awarded $270 million of those projects in the third quarter. In addition, an option for work in Jacksonville was awarded for $96.6 million, bringing the total amount of work added to backlog in the quarter to $366.6 million, ending the quarter with a backlog of $653.7 million.”
Chief Executive Officer Lasse Petterson commented, “Bidding activity increased significantly, with over $1.0 billion in projects bid in the third quarter. The third quarter reflects solid project performance which produced results in line with our expectations. Operationally, the quarter had lower dredging activity, due to several vessel dry dockings. Most of these dry dockings are now complete and those vessels are actively engaged on projects in the fourth quarter. The impact was partially offset by improved performance on the San Jacinto flood prevention project in Houston, Texas and the Jacksonville port deepening project in Florida. Strong performance is also a result of safe project execution as we continue to focus on improving safety on our projects.
As stated previously, the third quarter had over $1 billion in projects bid. Great Lakes was awarded $270 million of those projects in the third quarter. In addition, an option for work in Jacksonville was awarded for $96.6 million, bringing the total amount of work added to backlog in the quarter to $366.6 million, ending the quarter with a backlog of $653.7 million.”
Market Update
As expected, the 2019 domestic bid market remains strong after an active third quarter. We continue to expect the trend of additional phases of multiple large deepening and other capital projects to be bid in the fourth quarter and in 2020, keeping the domestic bid market at these higher levels. The projects coming into the pipeline include additional phases of work in Corpus Christi and new projects in the Ports of Norfolk, Virginia and Freeport, Texas. In addition to this anticipated capital work, we also expect to bid on multiple projects funded by the $17.4 billion disaster supplemental appropriations following several natural disasters, such as Hurricane Florence and Hurricane Michael that occurred in 2018. While most of this funding is for non-dredging projects like flood control, there is a significant portion that is intended to be deployed in our sector to recover from the damage caused by coastal storms and to reduce the risk of future damage from flood and storm events. Although we have not yet bid on these projects, we do expect the projects to come into the market before the end of the year.
In addition to the deepening and coastal protection projects, several Liquefied Natural Gas, petrochemical and crude oil projects are creating the need for port development in support of energy exports. We believe several of these private client projects are progressing to bid in 2019 and 2020. Great Lakes’ fleet and safety performance position the Company well to perform in this growing segment of the marke
As expected, the 2019 domestic bid market remains strong after an active third quarter. We continue to expect the trend of additional phases of multiple large deepening and other capital projects to be bid in the fourth quarter and in 2020, keeping the domestic bid market at these higher levels. The projects coming into the pipeline include additional phases of work in Corpus Christi and new projects in the Ports of Norfolk, Virginia and Freeport, Texas. In addition to this anticipated capital work, we also expect to bid on multiple projects funded by the $17.4 billion disaster supplemental appropriations following several natural disasters, such as Hurricane Florence and Hurricane Michael that occurred in 2018. While most of this funding is for non-dredging projects like flood control, there is a significant portion that is intended to be deployed in our sector to recover from the damage caused by coastal storms and to reduce the risk of future damage from flood and storm events. Although we have not yet bid on these projects, we do expect the projects to come into the market before the end of the year.
In addition to the deepening and coastal protection projects, several Liquefied Natural Gas, petrochemical and crude oil projects are creating the need for port development in support of energy exports. We believe several of these private client projects are progressing to bid in 2019 and 2020. Great Lakes’ fleet and safety performance position the Company well to perform in this growing segment of the marke
Great Lakes Dredge & Dock (NASDAQ: GLDD) stock price history
The image below, obtained from Google, shows the stock price history of Great Lakes Dredge & Dock (NASDAQ: GLDD) for the last 5 years. And its been a decent time for Great Lakes Dredge & Dock stockholders. 5 years ago Great Lakes Dredge & Dock stock was trading at around $7.30 a stock and its currently trading at $9.66. That's a return of 32.3% provided to Great Lakes Dredge & Dock stock holders over the last 5 years.
Great Lakes Dredge & Dock is also trading at closer to its 52 week high of $11.81 than it is to its 52 week low of $6.09 which is a clear indication that the short term sentiment and momentum of Great Lakes Dredge & Dock stock is positive.
Great Lakes Dredge & Dock is also trading at closer to its 52 week high of $11.81 than it is to its 52 week low of $6.09 which is a clear indication that the short term sentiment and momentum of Great Lakes Dredge & Dock stock is positive.
Recent coverage of Great Lakes Dredging & Dock
The extract below shows recent coverage of Great Lakes Dredge & Dock as obtained from TheStreet.com
OAK BROOK, Ill., Oct. 02, 2019 (GLOBE NEWSWIRE) -- Great Lakes Dredge & Dock Corporation ("Great Lakes") (NASDAQ:GLDD), the largest provider of dredging services in the United States announced today the receipt of several major dredging awards totaling $178 million. The awarded work includes:
Great Lakes will be working on the Ship Island Phases 3 and 4 of the MSCIP Barrier Island Restoration Plan, which is a continuation of, and final phases for, the restoration of Ship Island in the Gulf Islands National Seashore barrier island chain. This project supplements the initial closure of the Camille Cut breach that restored Ship Island back to a single contiguous barrier island and was performed by Great Lakes' ATB hopper dredge Ellis Island in 2018. This project is expected to commence in 2019 with completion by October 2020. Great Egg/Peck Beach New Jersey project involves beach protection and restoration for Ocean City Beach, Upper Township Beach and Sea Isle City Beach in New Jersey. Work on this project will commence in the spring of 2020. The Post-Florence Renourishment Project is the second phase of beach nourishments that replace sand lost in the hurricane. Work performed will enhance the shorelines at Emerald Isle, Pine Knoll Shores and Atlantic Beach. Great Lakes completed phase one in April 2019. This project will commence January 2020 with completion by April 2020. The Kings Bay Entrance Channel project involves maintenance dredging of the entrance channel and parts of the inner channel to the Kings Bay Submarine Naval Base and the port of Fernandina. In addition, the project includes a beneficial use component placing dredged sand on the beach near Fort Clinch State Park and the northern portion of Fernandina Beach in Nassau County. Work is expected to commence in December 2019 with completion by the end of March 2020.
OAK BROOK, Ill., Oct. 02, 2019 (GLOBE NEWSWIRE) -- Great Lakes Dredge & Dock Corporation ("Great Lakes") (NASDAQ:GLDD), the largest provider of dredging services in the United States announced today the receipt of several major dredging awards totaling $178 million. The awarded work includes:
- Mississippi Coastal Improvements Program (MSCIP), Comprehensive Barrier Island Restoration Plan (Coastal Restoration, Mississippi, $56.7 million);
- Great Egg/Peck Beach New Jersey (Coastal Protection, New Jersey, $32.5 million)
- Post-Florence Renourishment Project (Coastal Protection, North Carolina, $27.3 million);
- Kings Bay Entrance Channel (Maintenance, Florida, $15.6 million);
- Six additional maintenance and coastal protection awards totaling $46.2 million.
Great Lakes will be working on the Ship Island Phases 3 and 4 of the MSCIP Barrier Island Restoration Plan, which is a continuation of, and final phases for, the restoration of Ship Island in the Gulf Islands National Seashore barrier island chain. This project supplements the initial closure of the Camille Cut breach that restored Ship Island back to a single contiguous barrier island and was performed by Great Lakes' ATB hopper dredge Ellis Island in 2018. This project is expected to commence in 2019 with completion by October 2020. Great Egg/Peck Beach New Jersey project involves beach protection and restoration for Ocean City Beach, Upper Township Beach and Sea Isle City Beach in New Jersey. Work on this project will commence in the spring of 2020. The Post-Florence Renourishment Project is the second phase of beach nourishments that replace sand lost in the hurricane. Work performed will enhance the shorelines at Emerald Isle, Pine Knoll Shores and Atlantic Beach. Great Lakes completed phase one in April 2019. This project will commence January 2020 with completion by April 2020. The Kings Bay Entrance Channel project involves maintenance dredging of the entrance channel and parts of the inner channel to the Kings Bay Submarine Naval Base and the port of Fernandina. In addition, the project includes a beneficial use component placing dredged sand on the beach near Fort Clinch State Park and the northern portion of Fernandina Beach in Nassau County. Work is expected to commence in December 2019 with completion by the end of March 2020.
Great Lakes Dredge & Dock (NASDAQ: GLDD) latest stock valuation
So based on Great Lakes Dredge & Dock latest earnings report and their fiscal guidance provided what do we value Great Lakes Dredge & Dock stock at? Based on their earnings reported and fiscal guidance provided our valuation model provides a target (full value) price for Great Lakes Dredge & Dock at $11.60 per stock
We therefore believe that the stock of Great Lakes Dredge & Dock is undervalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $11.60. A good entry price into Great Lakes Dredge & Dock would therefore be at $10.40 or below. We expect the stock price of Great Lakes Dredge & Dock to kick up from current levels to levels closer to our target (full value) price in coming weeks and months.
Since the stock of Great Lakes Dredge & Dock is trading at well below our suggested entry point into the stock we rate Great Lakes Dredge & Dock as a buy
We therefore believe that the stock of Great Lakes Dredge & Dock is undervalued. We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price, which in this case is $11.60. A good entry price into Great Lakes Dredge & Dock would therefore be at $10.40 or below. We expect the stock price of Great Lakes Dredge & Dock to kick up from current levels to levels closer to our target (full value) price in coming weeks and months.
Since the stock of Great Lakes Dredge & Dock is trading at well below our suggested entry point into the stock we rate Great Lakes Dredge & Dock as a buy
Next earnings release of Great Lakes Dredge & Dock
It is expected that Great Lakes Dredge & Dock will release their 4th quarter and full fiscal 2019 results in early February 2020