Great Lakes Dredge & Dock (GLDD) reported a strong third quarter, with total revenue up 63.1% year over year to $191.2 million, beating consensus of 7.1 million dollars. This increase in revenue is due to the company’s newest hopper dredger, the Galveston Island, operational since January, as well as increased revenue from capital and coastal protection projects. Although earnings improved sharply to $0.13 per share from a loss of $0.09 a year earlier, it missed analysts’ target of $0.18 due to additional costs for accelerate the drydocking of another dredger and higher incentive compensation, reflecting the company’s strong operational performance so far in 2024.

The slight shortfall does not overshadow the proactive steps the company is taking to accelerate revenue generation and reward high performance. After all, in the first nine months of 2024, GLDD’s revenue reached $559.9 million, an increase of 37.3% from the previous year, beating the consensus of $40.3 million. dollars. And even with the higher costs absorbed in the third quarter, year-to-date earnings improved from a loss of $0.12 in the first three quarters of 2023 to $0.55 per share , more than double the Street’s forecast of $0.27 and fueling a 65% rise in price. stock so far this year.

More importantly, GLDD’s momentum appears sustainable, supported by strong order flow in the third quarter with new orders totaling $543 million and an order-to-bill ratio close to three times quarterly revenue. This includes three port deepening projects and six beach renovation projects, collectively representing approximately 80% of all capital market and coastal protection projects proposed 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. As a result, GLDD ended the third quarter with a record backlog of $1.21 billion, plus an additional $465 million in low bids and options, a significant increase from previous 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 success rate and increased order backlog likely contributed to Recent credit rating upgrade from S&P Global Ratings for GLDD, by moving it from “CCC+” to “B-”, which should help reduce borrowing costs. GLDD is also confident that revenues and margins will be stronger in the current quarter than in the third quarter. The company expects fourth-quarter revenue to be the top 10% of its current backlog of $192 million to $228 million, with the midpoint of $210 million being comparing favorably to the consensus estimate of $197.2 million. Combined with its Amelia Island dredging hopper still on track to enter service in the second half of 2025, GLDD appears poised for continued growth next year, which should further increase its stock.

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