ARB Inc., a unit of the West Construction Services segment of Primoris Services Corporation PRIM, declared three new Master Service Agreements (MSAs) worth $63 million with utility customers. All the MSAs are for three years, with two additional one-year options, and are scheduled to start immediately.
The first MSA contract is from a major Southern California utility customer. Scope of work involves upgrades of the gas and electric infrastructure in existing mobile home parks. This MSA is estimated to generate $10 million per year.
The second MSA award is from a major Northern California utility customer. It entails inspecting all sewers with mobile camera systems near recent utility construction sites. This MSA is expected to generate $7 million per year.
The third MSA award is from the same Northern California utility customer from whom Primoris received the second contract. Per the deal, the company will assign meter relocation activity to provide easier access for meter readers and maintenance. The MSA is estimated to generate $4 million per year.
Primoris recorded backlog of $2.05 billion as of Sep 30, 2015 against $2 billion as of Dec 31, 2014. During the next four quarters, the company is expected to realize revenues of around 52% from the East Construction Services segment backlog, about 81% from the West Construction Services segment backlog and 100% from the Energy segment.
Primoris is optimistic about bidding opportunities for the next year, which will continue to increase backlog in 2016 and beyond. Benefits from geography and market diversity as well as those from the expected boom in capital pipeline construction will also 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 #3 (Hold). Some better-ranked stocks in the sector are Dycom Industries Inc. DY, Jiangsu Expressway Co. Ltd. JEXYY and Zhejiang Expressway Co. Ltd. ZHEXY. While Dycom Industries sports a Zacks Rank #1 (Strong Buy), Jiangsu Expressway and Zhejiang Expressway carry a Zacks Rank #2 (Buy).
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