ARB Inc., part of Primoris Services Corporation’s PRIM West Construction Services segment, has secured a California power plant contract. The award valued at over $200 million is from a major independent power producer.
The 500 megawatts capacity of natural gas-fired simple cycle power plant is located in San Diego. The contract secured by the underground division of ARB in a joint venture with Kansas City-based Burns & McDonnell Engineering Company, Inc. involves engineering, procurement and construction work.
Scope of the contract also involves start-up and commissioning services for this repowering project. Moreover, the three existing steam boiler units 1, 2, and 3 of the adjacent power plant will be closed on successful commercial operation of the new facility.
This industrial contract is the first major one won by Primoris subsequent to its first-quarter 2015 results. Meanwhile, Primoris has secured two parking structure contracts, the combined value of which stands at $41 million and an underground contract worth $13 million.
Primoris reported disappointing first-quarter results due to uncertainty in the energy market and severe winter weather. However, total backlog of the company was a record $2.14 billion as of Mar 31, 2015 against $2 billion as of Dec 31, 2014.
During the next four quarters, Primoris is expected to realize revenues of around 53% from the East Construction Services segment backlog, about 73% from the West Construction Services segment backlog and 98% from the Energy segment.
Primoris will benefit from increase in backlog, diversity in new projects, and the level of bidding activity. The drivers for industrial, utility, power and pipeline markets remain positive, which will also drive Primoris’ growth. Moreover, strong balance sheet position and acquisition prospects will strengthen the company’s performance.
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.
Primoris currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the sector are Dycom Industries Inc. DY, Quanex Building Products Corporation NX and Headwaters Incorporated HW. All these stocks carry a Zacks Rank #1 (Strong Buy).
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