Primoris Services Corporation's PRIM unit Rockford Corporation, which was formed as part of a joint venture (JV), has received a new contract from Atlantic Coast Pipeline, LLC ("ACP"). ACP has proposed a 600 mile natural gas transmission pipeline to bring the much-needed energy to Virginia and North Carolina. ACP has also signed a construction deal with Spring Ridge Constructors, LLC (SRC), a JV formed between Rockford Corporation and other leading natural gas pipeline construction companies.
Per the contract, ACP would install pipeline from Harrison County, WV, southeast through Virginia with a lateral extension to Chesapeake, VA, and then south through eastern North Carolina to Robeson County.
The SRC JV will serve as the ACP's lead construction contractor for the deal. Apart from Primoris’ Rockford Corporation, the SRC JV comprises, Price Gregory International, Inc., a Quanta Services, Inc. PWR company and U.S. Pipeline, Inc.; SMPC, LLC.
The contract is pending for approval from the Federal Energy Regulatory Commission ("FERC"). The construction is scheduled to begin in the fall of 2017, if approved.
In early September, Primoris announced the extension of two Master Service Agreements with a major utility customer. The company also won a new heavy civil award valued at around $16 million by the Harris County Flood Control District in August.
In the second quarter, Primoris posted a 43% year-over-year increase in earnings per share to 10 cents per share, while revenues declined 5.6% year over year. Nevertheless, Primoris is optimistic about its business growth, going forward. The company is positive about bidding opportunities, which will continue to increase its backlog. Moreover, benefits from geography and market diversity as well as those from the expected boom in capital pipeline construction will aid and in turn, boost revenues.
Dallas, TX-based Primoris is a specialty contractor and infrastructure company that serves diverse end markets. The company also provides a wide range of construction, fabrication, maintenance, replacement, water and wastewater as well as engineering services to major public utilities, petrochemical companies, energy companies, municipalities and other customers.
At present, Primoris has a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the sector are MasTec, Inc. MTZ and EMCOR Group Inc. EME. While MasTec sports a Zacks Rank #1 (Strong Buy), EMCOR Group carriesa Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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