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Martin Marietta (MLM) Beats on Q1 Earnings, Margins Down
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Martin Marietta Materials, Inc.'s (MLM - Free Report) first-quarter 2017 adjusted earnings per share of 67 cents surpassed the Zacks Consensus Estimate of 66 cents by 1.5%. However, earnings declined 2.9% from the prior-year quarter.
Total revenue (including freight and delivery) of $843.9 million surpassed the Zacks Consensus Estimate of $724.7 million by 16.4% and increased 6.9% from the year-ago quarter. Freight and delivery revenues were $52.2 million, down 4.7% year over year.
Segment Discussion
The Building Materials business includes aggregates, cement, ready mixed concrete, asphalt and paving product lines.
Building Materials’ net sales grew 8% to $728.4 million on the back of pricing gains in aggregates, cement and ready mixed concrete.
Aggregates’ net sales grew 4.8% to $451.4 million. Ready Mixed Concrete net sales rose 18.9% to $222.4 million while Cement net sales of $93.7 million decreased 3.3%. Net sales of Asphalt and Paving business were $26.6 million, compared with $13.8 million in the prior-year quarter.
Shipments (volume) in the aggregates product line were flat. Geographically, Mid-America and West Groups aggregate volumes declined 1.5% and 1.3%, respectively, whereas the Southeast Group reported a 16% increase in volume.
Revenues at the Magnesia Specialties segment, which includes magnesium oxide, magnesium hydroxide and dolomite lime products, increased 6.4% year over year to $63.3 million, driven by chemicals and lime product lines.
Steel capacity utilization increased approximately 74%, compared with the prior-year utilization rate of approximately 72%.
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise
Total adjusted gross margin (excluding freight and delivery revenues) decreased 120 basis points (bps) to 18.6%.
Building Materials business' gross margin (excluding freight and delivery revenues) of 17.2% decreased 150 bps owing to investments to boost demand, the fixed cost nature of the business during a seasonally lower volume quarter and carefully executed inventory management plans.
Financials
Martin Marietta ended the quarter with cash and cash equivalents of $55.4 million, as of Mar 31, 2017, compared with $27.2 million as of Mar 31, 2016 and $50 million as on Dec 31, 2016.
In the first quarter, the company repurchased 458,000 shares, returning $126.6 million to shareholders. As of Mar 31, 2017, there were 62.8 million shares of Martin Marietta common stock outstanding and 14.6 million shares remaining under the current repurchase authorization.
2017 Guidance
Net sales are now expected in the band of $3.75 billion to $3.95 billion.
Aggregates Product line net sales are expected in the band of $2.2–$2.3 billion. Aggregates product line volume is expected to increase in the range of 4–5.5%.
Cement Product Line net sales are projected in the range of $380–$400 million.
Ready Mixed Concrete and Asphalt/Paving Product Lines net sales are expected in the range of $1.3–$1.4 billion.
Magnesia Specialties Business net sales are likely to come between $235 billion and $240 billion.
Non-residential market is expected to increase in a low to mid-single digit range. Meanwhile, the residential market is expected to grow in mid to high-single digit range. The ChemRock/Rail market volumes are likely to remain stable.
D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the second quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.7% and 5.2%, respectively.
NVR, Inc. (NVR - Free Report) reported first-quarter 2017 earnings of $25.12 per share, surpassing the Zacks Consensus Estimate by 27.3%. The reported figure also rose 59% from the year-ago profit level.
Upcoming Release in the Sector
Louisiana-Pacific Corp. (LPX - Free Report) is scheduled to release its quarterly numbers on May 5. The Zacks Consensus Estimate for earnings is pegged at 29 cents, highlighting an increase of 319.1% on a year-over-year basis.
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Martin Marietta (MLM) Beats on Q1 Earnings, Margins Down
Martin Marietta Materials, Inc.'s (MLM - Free Report) first-quarter 2017 adjusted earnings per share of 67 cents surpassed the Zacks Consensus Estimate of 66 cents by 1.5%. However, earnings declined 2.9% from the prior-year quarter.
Total revenue (including freight and delivery) of $843.9 million surpassed the Zacks Consensus Estimate of $724.7 million by 16.4% and increased 6.9% from the year-ago quarter. Freight and delivery revenues were $52.2 million, down 4.7% year over year.
Segment Discussion
The Building Materials business includes aggregates, cement, ready mixed concrete, asphalt and paving product lines.
Building Materials’ net sales grew 8% to $728.4 million on the back of pricing gains in aggregates, cement and ready mixed concrete.
Aggregates’ net sales grew 4.8% to $451.4 million. Ready Mixed Concrete net sales rose 18.9% to $222.4 million while Cement net sales of $93.7 million decreased 3.3%. Net sales of Asphalt and Paving business were $26.6 million, compared with $13.8 million in the prior-year quarter.
Shipments (volume) in the aggregates product line were flat. Geographically, Mid-America and West Groups aggregate volumes declined 1.5% and 1.3%, respectively, whereas the Southeast Group reported a 16% increase in volume.
Revenues at the Magnesia Specialties segment, which includes magnesium oxide, magnesium hydroxide and dolomite lime products, increased 6.4% year over year to $63.3 million, driven by chemicals and lime product lines.
Steel capacity utilization increased approximately 74%, compared with the prior-year utilization rate of approximately 72%.
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise | Martin Marietta Materials, Inc. Quote
Margins Down
Total adjusted gross margin (excluding freight and delivery revenues) decreased 120 basis points (bps) to 18.6%.
Building Materials business' gross margin (excluding freight and delivery revenues) of 17.2% decreased 150 bps owing to investments to boost demand, the fixed cost nature of the business during a seasonally lower volume quarter and carefully executed inventory management plans.
Financials
Martin Marietta ended the quarter with cash and cash equivalents of $55.4 million, as of Mar 31, 2017, compared with $27.2 million as of Mar 31, 2016 and $50 million as on Dec 31, 2016.
In the first quarter, the company repurchased 458,000 shares, returning $126.6 million to shareholders. As of Mar 31, 2017, there were 62.8 million shares of Martin Marietta common stock outstanding and 14.6 million shares remaining under the current repurchase authorization.
2017 Guidance
Net sales are now expected in the band of $3.75 billion to $3.95 billion.
Aggregates Product line net sales are expected in the band of $2.2–$2.3 billion. Aggregates product line volume is expected to increase in the range of 4–5.5%.
Cement Product Line net sales are projected in the range of $380–$400 million.
Ready Mixed Concrete and Asphalt/Paving Product Lines net sales are expected in the range of $1.3–$1.4 billion.
Magnesia Specialties Business net sales are likely to come between $235 billion and $240 billion.
Non-residential market is expected to increase in a low to mid-single digit range. Meanwhile, the residential market is expected to grow in mid to high-single digit range. The ChemRock/Rail market volumes are likely to remain stable.
Zacks Rank & Peer Releases
Martin Marietta carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the second quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.7% and 5.2%, respectively.
NVR, Inc. (NVR - Free Report) reported first-quarter 2017 earnings of $25.12 per share, surpassing the Zacks Consensus Estimate by 27.3%. The reported figure also rose 59% from the year-ago profit level.
Upcoming Release in the Sector
Louisiana-Pacific Corp. (LPX - Free Report) is scheduled to release its quarterly numbers on May 5. The Zacks Consensus Estimate for earnings is pegged at 29 cents, highlighting an increase of 319.1% on a year-over-year basis.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>