Granite Awarded $89M Subcontract for United Airlines Terminal B Airside Transformation Program

Rhea-AI Summary

Granite (NYSE:GVA) has secured an $89 million subcontract from United Airlines and Manhattan Construction for the United Airlines Terminal B Airside Transformation program at George Bush Intercontinental Airport (IAH). This project is part of a $2 billion initiative funded by United Airlines and the City of Houston. Granite's responsibilities include demolishing and reconstructing the north concrete apron, involving 126,000 SY of demolition and 154,000 SY of concrete paving. The project aims to modernize Terminal B, adding more gates and amenities for travelers. It will start in Summer 2024 and complete by April 2026. The initiative supports Granite's strategy to broaden its Texas Region portfolio and enhance its presence in Houston.

Positive

• Granite awarded $89 million subcontract for significant airport project.
• Includes 154,000 SY of concrete paving, demonstrating core competency.
• Supports $2 billion initiative to modernize George Bush Intercontinental Airport.
• Strengthens Granite’s presence and strategic portfolio in the Texas Region.
• Project expected to enhance traveler experience with more gates and amenities.
• Construction to begin in Summer 2024 and complete by April 2026.
• Part of Granite's strategic plan to diversify its operational presence in Houston.

Negative

• Project completion timeline extends to April 2026, potentially delaying returns.
• The extensive scope includes 126,000 SY of demolition, posing execution risks.
• Dependence on the successful coordination with multiple stakeholders (United Airlines, City of Houston).
• Large scale project could result in increased operational costs.

Insights

Financial Analyst

Granite's $89 million subcontract for the United Airlines Terminal B Airside Transformation Program represents a significant revenue stream. From a financial perspective, this addition to their backlog enhances their visibility for future revenues. Investors should consider that such large contracts may stabilize Granite's earnings and provide a buffer against market volatility. However, the benefits depend on timely project completion and cost management.

In the short-term, this announcement may positively influence Granite's stock price as it demonstrates their capacity to secure high-value contracts. Investors should monitor quarterly earnings for any impact on profit margins, especially if there are delays or budget overruns.

Market Research Analyst

The project aligns with Granite's strategic expansion into the Houston market. This is significant as it shows their commitment to establishing a strong presence in a key geographic area. Houston is a major hub with ongoing infrastructure needs, so having a foothold can lead to more opportunities. Investors can view this as a strategic move that enhances Granite's competitive positioning in the region, potentially leading to more business in the future.

Additionally, the project underscores the importance of public-private partnerships in funding large-scale infrastructure projects. United Airlines and the City of Houston's involvement reflects a growing trend where private and public sectors collaborate on essential projects, offering firms like Granite a reliable pipeline of work.

WATSONVILLE, Calif.--(BUSINESS WIRE)-- Granite (NYSE:GVA) is pleased to announce that it has been awarded an $89 million subcontract by United Airlines and Manhattan Construction as part of the overall United Airlines Terminal B Airside Transformation program, a $2 billion initiative funded by United Airlines and the City of Houston (Houston Airport System). The project will be included in Granite’s second-quarter CAP.

Under this program, the north and south concourses of Terminal B at George Bush Intercontinental Airport (IAH), one of the airport’s oldest terminals, will be renovated. Granite’s scope of work includes the demolition and reconstruction of the existing north concrete apron. This will pave the way for the construction of a new terminal that will accommodate more gates and provide updated amenities for travelers.

The project involves approximately 126,000 SY of demolition, 154,000 SY of concrete paving for the new apron and service roads, and associated earthwork, utility coordination, and drainage work.

“Granite has a successful history of providing crucial infrastructure projects that enhance connectivity and create opportunities for businesses in the Houston area,” said Domingo Gonzalez, Granite Area Manager. “Our team is proud to be part of the project delivering important enhancements to IAH’s Terminal B, which will benefit millions of travelers in the coming years.”

Nick Godkin, Granite Construction Manager, added, “Concrete paving is a scope of work Granite’s Houston area team does very well. With more than 154,000 SY of paving reconstruction, our team will help transform this important infrastructure project on the north side of Houston.”

This project is part of Granite’s strategic plan to diversify the Texas Region’s portfolio. It supports Granite’s continued efforts to increase its operational presence in the greater Houston area and further establish Houston as a Home Market for the Texas Region.

The project is anticipated to begin in Summer 2024 and is expected to be completed in April 2026.

About Granite

Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified construction and construction materials companies in the United States as well as a full-suite civil construction provider. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit the Granite website, graniteconstruction.com, and connect with Granite on LinkedIn, X, Facebook, and Instagram.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522439230/en/

Granite Contacts

Media

Erin Kuhlman 831-768-4111

Investors

Wenjun Xu - 831-761-7861

Source: Granite

FAQ

What is the value of the subcontract awarded to Granite for the Terminal B project?

Granite has been awarded an $89 million subcontract for the Terminal B Airside Transformation program at George Bush Intercontinental Airport.

When is the Granite subcontract project at IAH expected to start and complete?

The project is set to begin in Summer 2024 and is expected to be completed by April 2026.

What does Granite's scope of work include for the Terminal B project?

Granite's scope includes demolishing and reconstructing the north concrete apron, involving 126,000 SY of demolition and 154,000 SY of concrete paving.

How does the Terminal B project align with Granite's strategic goals?

The project supports Granite’s strategic plan to diversify its Texas Region portfolio and enhance its presence in Houston.

Who is funding the $2 billion initiative that includes Granite's subcontract?

The $2 billion initiative is funded by United Airlines and the City of Houston (Houston Airport System).