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The Federal Reserve raised interest rates this week for the first time in three years. Higher rates make it more expensive for companies to borrow money and can slow down large construction projects that rely on government financing.
For a company like Construction Partners, which has been borrowing heavily to buy up smaller rivals, higher rates mean it will likely pay more to fund its future growth. While the company has a large backlog of signed work, a long period of high rates could eventually squeeze the infrastructure budgets of the states where it operates.
Source: CNBC Television
Construction Partners has acquired Asphalt Express Enterprises, a company that moves and supplies liquid asphalt. This deal helps the company control more of its own supply chain in Oklahoma and North Texas, rather than relying on outside vendors for the materials it needs to pave roads.
This fits the company's strategy of owning the plants and transportation that feed its construction crews. By controlling the supply of liquid asphalt, the company can better manage its costs and ensure its teams have the materials they need exactly when they need them, which is critical for keeping large highway projects on schedule.
Source: PRNewsWire
Management has beaten its own profit targets in six of the last eight quarters, often by wide margins. This shows a business that is growing faster than even its own leaders expect.
| Expectation | |
|---|---|
| EPS | $1.42 |
| Revenue | $1.09B |
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