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Orion Marine Group (ORN) Tops Q4 EPS by 3c, Offers Outlook

March 10, 2016 7:12 AM

Orion Marine Group (NYSE: ORN) reported Q4 EPS of $0.05, $0.03 better than the analyst estimate of $0.02. Revenue for the quarter came in at $161.9 million versus the consensus estimate of $166.66 million.

Outlook

"We continue to see solid demand for our services that should support improved results in 2016," said Mr. Stauffer. "With the remaining three Tampa projects that experienced issues in the third quarter nearing completion, we are excited to capitalize on improving markets in the Heavy Civil Marine Construction segment. Additionally, the market in our Commercial Concrete Construction segment remains solid, with ample opportunities for growth in 2016.

"With an improved federal and state funding outlook, along with continued private sector demand, we remain optimistic for improved results in the Heavy Civil Marine Construction segment in 2016. The passage of the OMNIBUS funding bill last year is an encouraging development. Additionally, under the recently approved two year budget deal, appropriations for the fiscal year beginning October 1, 2016 should occur under regular order, which should allow the U. S. Army Corps of Engineers to let maintenance dredging projects at a more consistent and predictable pace. We were also pleased to see the passage of a 5 year, $305 billion transportation bill, called the FAST Act, in December. Among other transportation items, the FAST Act will fund bridge construction projects through various state departments of transportation. This long term bill will not only provide an increase in bid opportunities for bridge construction projects, but may also lead to improved bid pricing given the visibility provided to the market. We also continue to monitor developments in the private sector related to our midstream and downstream energy clients. As I have said over the past several quarters, despite the prolonged downturn in energy prices, we continue to see bid opportunities in this sector, driven by expansion of liquid terminals and petrochemical facilities.

"In the Commercial Concrete Construction segment, demand for services also remains solid. While we are seeing somewhat of a softening in the Houston market for multifamily and office construction, this type of work does not make up a large portion of our targeted work and is being offset by increasing demand for distribution, retail and warehouse space. Vacancy rates in retail spaces in Houston remain at historically low levels along with low vacancy rates for distribution and warehouse facilities near the Port of Houston. The Dallas market continues to be a source of growth. Vacancy rates in Dallas are also trending lower, which should continue to drive demand for our services in the area. In fact, the Commercial Concrete Construction segment ended the year with its highest level of backlog for Dallas projects in its history." “We were pleased with our bid activity and success rate in 2015 across both our segments," said Chris DeAlmeida, Orion Marine Group's Vice President and Chief Financial Officer. "In the Heavy Civil Marine segment, we bid on approximately $1.4 billion in 2015 and were successful on $324 million. This resulted in a 0.94 times book to bill for the year and an annual win rate of 23%. The Commercial Concrete Construction segment also had a healthy bid levels for the year, bidding on approximately $1.2 billion in work while being awarded approximately $264 million. This resulted in a 1.07 times book to bill for the year, on a pro-forma basis, and an annual win rate of 22%. Overall, we have over $568 million worth of bids outstanding, including approximately $82 million on which we are apparent low bidder or have been awarded subsequent to the end of the quarter.

Given our improving end markets across both our segments and robust bidding activity, we believe results for 2016 should be within the previously stated range.”

For earnings history and earnings-related data on Orion Marine Group (ORN) click here.

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