Great Lakes Dredge & Dock Reports Strong Q3 Performance
Great Lakes Dredge & Dock Corporation (NASDAQ: GLDD) reported a strong third-quarter performance for 2024 with revenues of $191.2 million, net income of $8.9 million, and adjusted EBITDA of $27 million. These figures indicate a significant increase compared to the previous year. The company signed new contracts totaling $543 million, including the notable $235 million Sabine-Neches Contract 6 Deepening project, reaching a record-high backlog of $1.2 billion. With an additional $465 million in pending bids, Great Lakes Dredge & Dock Corporation is expected to continue its revenue growth and maintain net visibility into operations by 2026.
Key Highlights:
- Strong third-quarter performance with $191.2 million in revenues, $8.9 million in net income, and $27 million in adjusted EBITDA.
- Signed new contracts valued at $543 million, achieving a record backlog of $1.2 billion.
- The Galveston Island dredge vessel has been commissioned, and construction of the Acadia vessel is ongoing.
- Gross profit margin rose to 19%, with total capital expenditures of $38.4 million in the third quarter.
- At quarter-end, there was $12 million in cash and no debt drawn on a $300 million credit facility.
- An increase in operational expectations for the fourth quarter, strong funding from the U.S. Army Corps of Engineers, and anticipated growth in the offshore wind market.
Company Outlook:
- Increasing capacity utilization and revenue expectations for the fourth quarter of 2024.
- Strong backlog and pending bids suggest revenue visibility through 2026.
- Bipartisan support for the Water Resources Development Act (WRDA) to finance Union projects through 2024.
- Growth in the U.S. offshore wind sector, with potential capacity reaching 80.5 gigawatts by 2025.
Negative Aspects:
- The company is waiting for the U.S. Army Corps of Engineers' budget for the 2025 fiscal year to be finalized on December 20.
- Ongoing discussions regarding the Empire Wind and Orsted Sunrise projects may impact future vessel utilization.
Positive Aspects:
- Record allotment for the U.S. Army Corps of Engineers in 2024 signals a strong budget for 2025.
- Massachusetts has signed 2.7 gigawatts of Power Purchase Agreements, bolstering the offshore wind market.
- High project performance and vessel utilization provide a solid fleet utilization backlog extending through 2026.
Shortcomings:
- No specific shortcoming mentioned in the earnings commentary.
Q&A Highlights: Lasse Petterson discussed reservations for the Acadia vessel, indicating a foundation for U.S. market operations starting in 2028. Adam Thalhimer inquired about potential LNG project opportunities. The sale of Tellurian to an Australian developer is anticipated to transition from low bids to contracts by late next year. Scott Kornblau forecasted a strong fourth-quarter revenue driven by full vessel utilization and steady capital project revenues extending into the following year.
Great Lakes Dredge & Dock Corporation demonstrated significant operational improvements in 2024. These improvements, characterized by high project performance and vessel utilization, have created a strong backlog that supports fleet utilization through 2026. The company’s management expects continuous revenue growth as fleets are modernized and operations expanded, particularly within the offshore wind sector. As the competitive landscape remains stable, the retirement of some older vessels allows for a fully utilized fleet. With strong performance in the third quarter and a positive outlook for upcoming quarters, Great Lakes Dredge & Dock Corporation is well-positioned to capitalize on opportunities in dredging and the offshore wind markets.
InvestingPro Forecasts: Great Lakes Dredge & Dock Corporation's (NASDAQ: GLDD) strong third-quarter performance for 2024 and positive outlook are also supported by recent InvestingPro data and insights. The company's market capitalization is $823.74 million, reflecting its solid position in the dredging industry.
InvestingPro data shows that GLDD's revenue growth has been impressive, with a reported increase of 33.74% year-over-year as of the third quarter of 2024 and a striking 63.14% increase in quarterly revenue. This aligns with the company's $191.2 million reported revenue in the third quarter and newly signed contracts worth $543 million.
The company's profitability is also noteworthy, with an 11.24% operating income margin and a 19.94% gross profit margin achieved over the last twelve months. These figures confirm the improvement in the reported gross profit margin of 19% in the third quarter.
InvestingPro insights emphasize that analysts expect GLDD's sales to grow this year. This is consistent with the company's robust backlog and anticipated increased activity in the fourth quarter. Additionally, the data indicates that GLDD is trading near its 52-week high (currently at 97.6% of its peak), reflecting the market's positive sentiment towards the company's recent performance and future prospects.
It's also important to note that GLDD has shown a total return of 35.63% in stock price over the past three months. This performance aligns with the record backlog and positive outlook mentioned in the company's earnings commentary.
For investors seeking a comprehensive analysis, InvestingPro offers 11 additional insights for GLDD, providing a deeper understanding of the company's financial health and market position.