The war in Iraq may be a boon to the bottom lines of some companies that rely on U.S. federal contracts but it is proving to be a drag on others. Great Lakes Dredge and Dock Co.'s 7.75% notes of '13 dropped 10 points and were trading in the mid-70s last week after it posted a disappointing earnings before interest, taxation, depreciation and amortization figure. EBITDA was $51 million this period, versus $58 million for the previous quarter; the company sold $175 million of high-yield bonds last December. An analyst attributed the poor earnings and subsequent drop in the secondary market to the preoccupation of the U.S. Army Corps Of Engineers, the U.S. Army entity that usually contracts Great Lakes, with Iraq. He explained the U.S. Army is responsible for digging and dredging rivers and federal contracts are an important part of Great Lakes' business. He said the army's focus on Iraq, and its massive allocation of funds to efforts there, has had a negative impact on Great Lakes. Deborah Wensel, cfo of the dredging company in Oak Brook, Ill., did not return a call by press time.
Great Lakes' High-Yield Notes Sink