Border infrastructure paintings and information heart web page preparation have grown to a higher proportion of Granite Development’s trade, with federal contracts trending towards 15% of earnings, the corporate mentioned on its first quarter income name Thursday. Information heart tasks may just account for some other 10%.
The ones will increase, partially, led the Watsonville, California-based contractor to up its 2026 earnings steerage. It mentioned it anticipated an extra $200 million in earnings from its border paintings in Southern Texas, with its fresh acquisition of Kenny Seng Development in Utah contributing some other $100 million. Granite mentioned it will proceed to search for extra acquisition goals shifting ahead.
The company added to its backlog as smartly, in spite of the cancellation of an roughly $300 million freeway venture in California. Granite President and CEO Kyle Larkin mentioned the withdrawal of the venture used to be uncommon and that the company’s total backlog build up “displays a bidding atmosphere that continues to be powerful on the federal, state and native and personal ranges.”
Information facilities and border paintings
Of its $7.2 billion in backlog on the finish of the primary quarter, roughly $640 million comes from tactical infrastructure tasks for U.S. Customs and Border Coverage. In 2025, Granite grabbed the primary border wall contract of President Donald Trump’s 2nd time period, then added a $495 million venture for tactical infrastructure paintings close to Laredo, Texas, in 2026.
That 2nd award quantity used to be higher than the smaller paintings applications Granite has pursued in recent times with a purpose to restrict the oversized possibility that includes multibillion-dollar, yearslong megaprojects. Then again, Larkin mentioned the short tempo of the Laredo paintings has given higher visibility into the contractor’s total possibility.
“That venture burns over round 14 months and so we predict to be proper round 40% whole” by way of the top of 2026, Larkin mentioned.
He broke the chance of the border paintings down into 3 classes: agenda, the far off jobsite and subcontractor and provider uncertainty.
Larkin mentioned the speedier tempo has mitigated agenda issues. Granite has additionally deployed assets within the area to counter its remoted location. After all, the builder has been picky with its providers.
“You take into consideration a $40 billion program alongside the border, there is numerous subcontractors and providers which are collaborating in that at ranges that they most likely usually do not take part in, and so there at all times is a few possibility,” Larkin mentioned. “So we are being very selective in regards to the companions that we have got in this venture.”
Certainly, Larkin mentioned the company was hoping to achieve extra border paintings within the area all over long run lettings expected for June and July.
On information facilities, Granite has been busy taking a picks-and-shovels strategy to the construction growth, carving out web page infrastructure and promoting fabrics for roads earlier than constructions pass up.
“We are effectively handing over and we’re supplying fabrics to tasks in Washington, Oregon, Nevada, Arizona, Louisiana and Mississippi,” Larkin mentioned. “We are actually ready to take on it from a civil element, a water element … and/or simply fabrics.”
Requested by way of analysts about the upward thrust in gas costs because of the battle in Iran, Larkin mentioned Granite hadn’t observed vital price will increase.
“The power surcharge we installed position after Q1 in 2021, and our fabrics trade in particular, that’s actually equipped us some excellent coverage round simply price will increase,” Larkin mentioned.
By means of the numbers
Granite reported a much broader web lack of $41.7 million for the primary quarter of 2026, in comparison to $33.7 million all over the similar duration in 2025, on earnings of $912.5 million, a 30% build up from a 12 months in the past.
Backlog, which the corporate refers to as dedicated and awarded tasks, or CAP, grew by way of $200 million sequentially from the fourth quarter to $7.2 billion. On a year-over-year foundation, that represented a $1.4 billion build up, or 24%, from the primary quarter of 2025. The company attributed $1.3 billion of its backlog to federal contracts.
The company additionally raised its full-year earnings steerage for 2026, expanding its projected vary to $5.2 billion to $5.4 billion. Prior to now, it had expected $4.9 billion to $5.1 billion in earnings for the 12 months.
