Knife River reports Q3 EPS $2.58, consensus $1.86

Reports Q3 revenue $1.09B, consensus $1.06B.”I would like to thank our entire Knife River team for their continued discipline in executing our EDGE plan to increase Adjusted EBITDA margins and deliver on our strategic goals,” Gray said. “A key part of that plan is optimizing our pricing to fully realize the value of our core products – aggregates, ready-mix concrete and asphalt – as well as our contracting services. Price increases outpaced costs for the quarter and positively contributed to our margins, as we made further progress toward our previously stated margin-expansion goals. On the contracting services side, we continued to be more selective by targeting higher-margin projects. This approach, combined with the timing of bid lettings in our states, has contributed to a lower backlog than third quarter 2022. However, the work in the backlog reflects improved margins and higher total profit than the prior year’s backlog. “We remain optimistic about the long-term strength of our markets, including the positive impact from local, state and federal funding,” Gray said. “As of August, nearly $80 billion in funding from the Infrastructure Investment and Jobs Act has been allocated to projects in states where Knife River operates. Additionally, states are also approving their own infrastructure spending, with Texas and Minnesota each recently announcing significant new funding for transportation infrastructure. “Given our results for the first nine months of the year, we have raised and narrowed our guidance for revenue and Adjusted EBITDA,” Gray said. “We expect full year 2023 revenue in the range of $2.7 billion to $2.8 billion and Adjusted EBITDA in the range of $400 million to $430 million. We are committed to our EDGE plan, to improving margins, to providing industry-leading return on invested capital, and to upholding our ‘Life at Knife’ culture – being a great place to work and putting people first.”