Great Lakes Dredge & Dock (GLDD) reported a strong Q3, with total revenues jumping 63.1% year-over-year to $191.2 million, beating consensus by $7.1 million. This revenue boost was driven by the company’s newest hopper dredge, the Galveston Island, operational since January, along with increased capital and coastal protection project revenues. While earnings improved sharply to $0.13 per share from a loss of $0.09 in the prior year, they missed analysts’ $0.18 target due to additional costs for accelerating the drydocking of another dredge and higher accrued incentive pay reflecting the company’s strong operational performance so far in 2024.
The slight earnings miss doesn’t overshadow the company’s proactive moves to expedite revenue generation and reward high performance. After all, through the first nine months of 2024, GLDD’s revenues reached $559.9 million—a 37.3% increase from the prior year, exceeding consensus by $40.3 million. And even with the higher costs absorbed in Q3, year-to-date earnings have improved from a loss of $0.12 in the first three quarters of 2023 to $0.55 per share, more than doubling the Street’s $0.27 forecast and fueling a 65% surge in the stock so far this year.
More importantly, GLDD’s momentum appears sustainable, supported by strong Q3 order flow with new awards totaling $543 million and a book-to-bill ratio close to three times the quarter’s revenue. This includes three port deepening and six beach renourishment projects, collectively representing around 80% of all capital market and coastal protection projects up for bid during the period. The largest of these was the Sabine-Neches Contract 6 Deepening project, with a base award and open options totaling $235 million. Consequently, GLDD ended Q3 with a record backlog of $1.21 billion, plus an additional $465 million in low bids and options—significantly up from prior quarters. And since the end of the quarter, the company has already converted $90 million of these pending awards into backlog.
The company’s high win rate and expanding backlog likely contributed to S&P Global Ratings’ recent credit rating upgrade for GLDD, moving it from “CCC+” to “B-,” which should support lower borrowing costs. GLDD is also confident that both revenues and margins will be stronger in the current quarter than in Q3. The company anticipates Q4 revenue to represent the upper teens of its current backlog—suggesting revenues of $192-228 million, with the $210 million midpoint comparing favorably to the $197.2 million consensus estimate. Combined with its Amelia Island dredge hopper still on track to enter service in the second half of 2025, GLDD seems poised for continued growth next year that should further lift its stock.
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