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MDU Resources Materials Group Takes First-Quarter Loss

MDU Resources Group Inc. reported first quarter earnings of $40.9 million, or 21 cents per share, compared to first quarter 2018 earnings of $42.4 million, or 22 cents per share.

The construction materials business experienced a seasonal loss in the first quarter, with a loss of $34.4 million this year compared to $23.5 million in 2018. Acquisitions that the company made in 2018 added to operations that are impacted by winter weather conditions, and the company experienced lower margins as a result of less-favorable weather conditions in certain regions. The construction materials backlog of work at March 31 was a record $943 million, compared to $692 million in 2018. 

The construction services business in the first quarter had record revenues, up about 26% over last year, and record earnings. Earnings were $20.0 million, approximately 33% higher than the $15.1 million earned in first quarter 2018. 

The company performed a higher volume of work for the hospitality and high-tech industries, as well as for other utility companies, during the quarter. It also saw an increase in sales and rentals of the utility construction equipment it manufactures. Its backlog of work at March 3 1was a record $1.02 billion, compared to $675 million at the same time last year.

"Our construction services business had record results in the first quarter, including record revenues, which has led us to increase our 2019 revenue guidance by $50 million for this business. Our utility and pipeline businesses also performed very well," said David L. Goodin, president and CEO of MDU Resources. "Our construction materials business experienced a larger first quarter loss compared to last year, which was anticipated as we added operations through acquisitions in 2018 in areas where construction activity is impacted by winter.

"Our construction businesses have combined record backlog of nearly $2 billion at March 31, giving us confidence as we enter the peak of the 2019 construction season," Goodin said. "Our natural gas pipeline business has begun construction on two expansion projects that we expect to be finished and in-service later this year. Our utility business recently announced that we plan to retire our wholly owned coal-fired electric generation units, and we continue to move forward with that effort while ensuring we are providing affordable, safe and reliable electricity to our customers."