Despite Growth, Firms Worry - Railworks Corporation

#04
THE TURNER CORP. has the most
domestic revenue, at $8.35 billion.
Most of Bechtel’s and Fluor’s revenue
comes from international work.
Markets’ Share of Revenue
OVERVIEW
39.6%
General
Building
$122,455.0
1.0%
Other
$3,158.6
1.5%
Hazardous
1.6%
Waste
2.3%
$4,532.8 Water Sewer
Telecom
$4701.8 and Waste
$7,029.7
$4,912.0
1.5%
3.3%
Manufacturing
$10,062.8
Industrial
$27,184.7
8.8%
9.3%
Power
$28,670.7
15.5%
Transportation
$48,028.2
Petroleum
$48,711.9
15.7%
(Measured $ millions)
Source: McGraw-Hill Construction
Research & Analytics / ENR.
Professional
Domestic
Staff Hiring
47
129
188
Professional
International
Staff Hiring
3
27
99
Increase
Decrease
Stayed the Same
(Measured in
firms reporting)
Source: McGraw-Hill Construction
Research & Analytics / ENR.
Fluor also is having a big year. On April 30, Fluor
and its partners received a notice to proceed on the
$3.14-billion Tappan Zee Bridge replacement project
in New York, and on May 2, Fluor won an ethylene
cracker project for Dow Chemical in Freeport, Texas.
“New awards for the quarter were strong [at] $6.5 billion,
including $3.1 billion in oil and gas and $2.2 billion
in industrial and infrastructure,” said Fluor CEO
David Seaton at a May 2 earnings conference. The
firm’s consolidated backlog is $37.5 billion, he says,
“which is down from a year ago primarily due to the
downturn in the mining-and-metals market.” But
Seaton is encouraged by improving margins on Fluor’s
backlog.
Kiewit Corp. also has reason to celebrate, having
won—with Macquarie Infrastructure & Real Assets,
Weeks Marine and Massman Construction—the
$1.5-billion Goethals Bridge replacement job in New
Jersey, and, with partner Skanska Koch, a $743.3-
million contract to raise the deck of the Bayonne
Bridge. Both contracts were awarded in late April.
369
Firms on the list
that sent in a
survey in 2012.
65.3%
Firms increased
revenue in 2012
over 2011.
33.9%
Firms that had
lower revenue
in 2012 than in
2011.
Getting Bigger
There has been a significant trend toward industry
consolidation over the past two decades. However,
much of this trend has been centered on the design
side of the market, with large, publicly owned companies—such
as AECOM, URS and Stantec—using their
financial capabilities to acquire capacity and market
share. But there have been some significant acquisitions
on the contracting side. For example, DPR
Construction made a major move into the Southeast
early this year by acquiring Atlanta-based Hardin
Construction.
A few large contractors have been in acquisition
mode. One major acquisition in the past year was by
Granite Construction, which acquired Northbrook,
Ill.-based heavy-civil contractor Kenny Construction.
“Together with Kenny, our plan is to expand our presence
into targeted markets such as power delivery and
water-and-wastewater infrastructure, both of which
have attractive long-term fundamentals,” said James
H. Roberts, CEO of Granite Construction, during a
recent investment-analyst teleconference. He also says
Kenny will bring Granite a greater presence in the
Midwest market.
But some contractors have not relied on acquisitions
to move into new markets. “In August of 2012,
we expanded our offerings to include environmental
services, specializing in assessments and abatement,”
says Bill Hannah, CEO of Nabholz Construction
Corp. He says the firm is moving beyond its privatesector
client base and now is successfully constructing
public highway and street projects.
enr.com May 20, 2013 ENR 3