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Vulcan Materials (VMC) Q4 Earnings, Revenues Miss Estimates
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Vulcan Materials Company’s (VMC - Free Report) fourth-quarter 2016 adjusted earnings of 69 cents per share missed the Zacks Consensus Estimate of 83 cents by 16.8%. Also, the bottom line decreased 6.7% from the prior-year quarter.
Total revenue of $873 million also missed the Zacks Consensus Estimate of $914.58 million by 4.6%. Sales, however, increased 2% from the prior-year quarter.
Fourth-quarter 2016 results were hurt by mid-December “ramp-down of the construction season” in many of its markets.
Revenues increased 1% year over year to $714 million. Freight-adjusted revenues jumped 1% year over year to $551 million.
Aggregates shipments (volumes) decreased 3.5% due to an earlier ramp-down to the construction season relative to the prior year's strong shipments through late December and persistently low volumes in California, Illinois and coastal Texas.
Adjusted gross profit margin of 37.9% decreased 430 basis points (bps) compared to the prior-year quarter.
Non-Aggregates
Total revenue at the Concrete segment was $87.3 million, up 19.9% year over year. Concrete segment gross profit was $8 million in the quarter compared with $5 million in the prior-year quarter. Sales volumes increased 16% from the prior-year quarter driven by increased volumes in each of the company's concrete markets.
Revenues at the Asphalt Mix segment were $123.7 million, up 3.3% owing to an increase in volumes. Asphalt segment gross profit was $22 million, up 19% year over year. Volumes increased 4%. However, solid sales and operating disciplines as well as effective materials margin management more than offset the modest decline in price.
Total revenue at the Calcium segment (formerly Cement) was $2.1 million, down 0.6% from the prior-year quarter. The segment reported gross profit of $0.9 million, compared with $1 million in the prior-year quarter.
Margin
Adjusted gross margin of 32.2% decreased 290 bps in the fourth quarter. Adjusted EBITDA decreased 6% year over year to $230 million.
Financials
As of Dec 31, 2016, cash and cash equivalents were $258.9 million, down from $284.0 million at 2015-end. During 2016, the company returned $268 million to shareholders through dividends and share repurchases. Vulcan repurchased approximately 1.4 million shares at an average cost of $113.18 during the year.
2016 Results
Vulcan reported adjusted earnings per share of $2.86 in 2016, which increased 32.4% year over year but missed the Zacks Consensus Estimate of $3.01. The company reported net sales of $3.59 billion, up 5% year over year. Net sales missed the Zacks Consensus Estimate of $3.65 billion.
Vulcan Materials Company Price, Consensus and EPS Surprise
Adjusted EBITDA is expected in the $1.125 billion to $1.225 billion range.
Aggregates shipments growth is expected in the 5% to 8 % range from 2016, with growth weighted more toward the second half of the year.
Asphalt, Concrete and Calcium gross profit growth is anticipated at around 15%.
Core capital spending is estimated at approximately $300 million to support the increased level of shipments and bring down production costs and boost operating efficiencies.
D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the first quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 17% and 6.8%, respectively.
KB Home (KBH - Free Report) reported its fourth-quarter 2016 numbers wherein earnings surpassed analysts’ expectations by 8.1% and revenues by 2%.
Lennar Corp. (LEN - Free Report) beat expectations on both the counts for the fourth time in a row in the fourth quarter of fiscal 2016.
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Vulcan Materials (VMC) Q4 Earnings, Revenues Miss Estimates
Vulcan Materials Company’s (VMC - Free Report) fourth-quarter 2016 adjusted earnings of 69 cents per share missed the Zacks Consensus Estimate of 83 cents by 16.8%. Also, the bottom line decreased 6.7% from the prior-year quarter.
Total revenue of $873 million also missed the Zacks Consensus Estimate of $914.58 million by 4.6%. Sales, however, increased 2% from the prior-year quarter.
Fourth-quarter 2016 results were hurt by mid-December “ramp-down of the construction season” in many of its markets.
Segment Details
Aggregates
Revenues increased 1% year over year to $714 million. Freight-adjusted revenues jumped 1% year over year to $551 million.
Aggregates shipments (volumes) decreased 3.5% due to an earlier ramp-down to the construction season relative to the prior year's strong shipments through late December and persistently low volumes in California, Illinois and coastal Texas.
Adjusted gross profit margin of 37.9% decreased 430 basis points (bps) compared to the prior-year quarter.
Non-Aggregates
Total revenue at the Concrete segment was $87.3 million, up 19.9% year over year. Concrete segment gross profit was $8 million in the quarter compared with $5 million in the prior-year quarter. Sales volumes increased 16% from the prior-year quarter driven by increased volumes in each of the company's concrete markets.
Revenues at the Asphalt Mix segment were $123.7 million, up 3.3% owing to an increase in volumes. Asphalt segment gross profit was $22 million, up 19% year over year. Volumes increased 4%. However, solid sales and operating disciplines as well as effective materials margin management more than offset the modest decline in price.
Total revenue at the Calcium segment (formerly Cement) was $2.1 million, down 0.6% from the prior-year quarter. The segment reported gross profit of $0.9 million, compared with $1 million in the prior-year quarter.
Margin
Adjusted gross margin of 32.2% decreased 290 bps in the fourth quarter. Adjusted EBITDA decreased 6% year over year to $230 million.
Financials
As of Dec 31, 2016, cash and cash equivalents were $258.9 million, down from $284.0 million at 2015-end. During 2016, the company returned $268 million to shareholders through dividends and share repurchases. Vulcan repurchased approximately 1.4 million shares at an average cost of $113.18 during the year.
2016 Results
Vulcan reported adjusted earnings per share of $2.86 in 2016, which increased 32.4% year over year but missed the Zacks Consensus Estimate of $3.01. The company reported net sales of $3.59 billion, up 5% year over year. Net sales missed the Zacks Consensus Estimate of $3.65 billion.
Vulcan Materials Company Price, Consensus and EPS Surprise
Vulcan Materials Company Price, Consensus and EPS Surprise | Vulcan Materials Company Quote
2017 Guidance
Adjusted EBITDA is expected in the $1.125 billion to $1.225 billion range.
Aggregates shipments growth is expected in the 5% to 8 % range from 2016, with growth weighted more toward the second half of the year.
Asphalt, Concrete and Calcium gross profit growth is anticipated at around 15%.
Core capital spending is estimated at approximately $300 million to support the increased level of shipments and bring down production costs and boost operating efficiencies.
Vulcan Materials carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the first quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 17% and 6.8%, respectively.
KB Home (KBH - Free Report) reported its fourth-quarter 2016 numbers wherein earnings surpassed analysts’ expectations by 8.1% and revenues by 2%.
Lennar Corp. (LEN - Free Report) beat expectations on both the counts for the fourth time in a row in the fourth quarter of fiscal 2016.
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