Shares of Great Lakes Dredge & Dock (GLDD 1.02%), a provider of dredging services, fell sharply at the open on Aug. 2, dropping as much as 20% in the first few minutes of the day. Although the stock had regained some of the lost ground by roughly 10:30 a.m. ET, it was still down a notable 16% or so. The news driving the drop was the company's second-quarter earnings release. Investors were clearly not pleased.
Second-quarter revenue came in at $149 million, down from just under $170 million in the prior year. That's a roughly 12% year-over-year decline. Great Lakes Dredge & Dock lost $0.06 per share in the quarter, down from a profit of $0.03 per share in the same span of 2021. These are not good results, but it was the commentary around the weak quarter that probably got investors in such a dour mood.
The first thing CEO Lasse Petterson said in the release was, "Our second quarter results did not meet expectations as we continue to face and navigate a challenging environment driven by external factors including supply chain delays, inflationary pressures, adverse weather conditions combined with some atypical dredging project challenges." Ouch! The list of problems included cost increases at three projects that the company is trying to pass through to customers, with discussions still ongoing. There were delays in dry dock as supply chain issues left parts short, which prevented the affected ships from getting back to work. Bad weather caused project setbacks. Also, there were fewer new projects. That's some list, and it's just a sample of the problems the company faced.
With a backdrop like that, it's little wonder investors sold the stock today. Worse, management expects the impact of these problems to cause it to miss its previous full-year guidance. That remains the case even though the company believes some, though not all, of the headwinds it is currently facing will subside. It really was a terrible, no-good quarter for Great Lakes Dredge & Dock.