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Martin Marietta (MLM): Will Volumes See an Uptick in 2H16?
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We issued an updated research report on Martin Marietta Materials, Inc. (MLM - Free Report) on Aug 22.
Martin Marietta is a U.S.-based leading supplier of construction aggregates, which are used for the construction of highways, infrastructure projects as well as for residential, commercial and industrial construction.
Though Martin Marietta began 2016 on a strong note, it delivered dismal results in the second quarter – the company missed the Zacks Consensus Estimate for both earnings and sales. Second-quarter results were announced on Aug 2.
Adjusted earnings per share of $1.90 were up 56% from the prior-year quarter as pricing gains and cost control mitigated soft sales growth. Net sales climbed almost 8% year over year as widespread pricing gains offset weak volumes. The company’s volumes in the quarter, primarily in Cement and Aggregates, were hurt by heavy rainfall, especially during the months of April and May, in key markets including Texas, North Carolina and Colorado.
Despite sluggish growth in the second quarter, most guidance parameters for 2016 were kept intact, as the company is positive about delivering solid results in the second half of the year.
Robust pricing gains, stable cost structure, synergies from the Texas Industries acquisition and higher infrastructure volumes augur well for growth.
The multi-year highway bill — the five-year, $305 billion FAST Act passed in December — increases the funding certainty of state transportation programs. This, along with state/local municipal level initiatives to finance infrastructure projects, should increase the construction of highways, streets, roads, and bridges, thereby propelling aggregates demand. Infrastructure end-market volume is anticipated to increase in the mid-to high single-digit range in 2016.
Other than higher infrastructure volumes, the positive volume trends in the residential and non-residential markets are expected to continue in the second half.
Non-residential end-market volume is estimated to grow in th high single digits. In the non-residential construction market, management expects shipments to increase in both the light and heavy construction sectors. Moreover, an improving economy and job growth are anticipated to boost private construction activities in the U.S. Residential market volumes are projected to increase in the double-digit range in 2016.
Zacks Rank & Stocks to Consider
Martin Marietta carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Eagle Materials Inc. (EXP - Free Report) , Gibraltar Industries, Inc. (ROCK - Free Report) and United Rentals, Inc. (URI - Free Report) . While Gibraltar Industries and United Rentals sport a Zacks Rank #1 (Strong Buy), Eagle Materials carries a Zacks Rank #2 (Buy).
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Martin Marietta (MLM): Will Volumes See an Uptick in 2H16?
We issued an updated research report on Martin Marietta Materials, Inc. (MLM - Free Report) on Aug 22.
Martin Marietta is a U.S.-based leading supplier of construction aggregates, which are used for the construction of highways, infrastructure projects as well as for residential, commercial and industrial construction.
Though Martin Marietta began 2016 on a strong note, it delivered dismal results in the second quarter – the company missed the Zacks Consensus Estimate for both earnings and sales. Second-quarter results were announced on Aug 2.
MARTIN MRT-MATL Price
MARTIN MRT-MATL Price | MARTIN MRT-MATL Quote
Adjusted earnings per share of $1.90 were up 56% from the prior-year quarter as pricing gains and cost control mitigated soft sales growth. Net sales climbed almost 8% year over year as widespread pricing gains offset weak volumes. The company’s volumes in the quarter, primarily in Cement and Aggregates, were hurt by heavy rainfall, especially during the months of April and May, in key markets including Texas, North Carolina and Colorado.
Despite sluggish growth in the second quarter, most guidance parameters for 2016 were kept intact, as the company is positive about delivering solid results in the second half of the year.
Robust pricing gains, stable cost structure, synergies from the Texas Industries acquisition and higher infrastructure volumes augur well for growth.
The multi-year highway bill — the five-year, $305 billion FAST Act passed in December — increases the funding certainty of state transportation programs. This, along with state/local municipal level initiatives to finance infrastructure projects, should increase the construction of highways, streets, roads, and bridges, thereby propelling aggregates demand. Infrastructure end-market volume is anticipated to increase in the mid-to high single-digit range in 2016.
Other than higher infrastructure volumes, the positive volume trends in the residential and non-residential markets are expected to continue in the second half.
Non-residential end-market volume is estimated to grow in th high single digits. In the non-residential construction market, management expects shipments to increase in both the light and heavy construction sectors. Moreover, an improving economy and job growth are anticipated to boost private construction activities in the U.S. Residential market volumes are projected to increase in the double-digit range in 2016.
Zacks Rank & Stocks to Consider
Martin Marietta carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same sector include Eagle Materials Inc. (EXP - Free Report) , Gibraltar Industries, Inc. (ROCK - Free Report) and United Rentals, Inc. (URI - Free Report) . While Gibraltar Industries and United Rentals sport a Zacks Rank #1 (Strong Buy), Eagle Materials carries a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>