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Will Inclement Weather Hurt Vulcan's (VMC) Q1 Earnings?
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Vulcan Materials (VMC - Free Report) is set to release first-quarter 2018 results on May 3, before the opening bell.
In the last reported quarter, the company delivered a positive earnings surprise of 12.8%. Notably, the company surpassed the Zacks Consensus Estimate in three of the last four quarters, the average earnings beat being 10.1%.
Let’s see how things are shaping up prior to this announcement.
Adverse weather conditions in many markets might mar Vulcan’s results in the to-be-reported quarter, thanks to shipment delays. Vulcan Materials is susceptible to bad weather conditions as most of its products are used outdoors in the public or private construction industry. Also, the company’s production and distribution facilities are located outdoors. Inclement weather affects the company’s ability to produce and distribute products. It also has a negative impact on demand as construction work can be hampered by weather. The first and fourth quarters are most affected by winter. Hurricanes in the Atlantic Ocean and Gulf Coast are prevalent during these periods.
Weak Top-Line Growth
Though adverse weather conditions is expected to mar growth prospects in the quarter, Vulcan’s various bolt-on acquisitions can be expected to provide some cushion to revenues. Moreover, improvement in private construction activities, especially private residential construction, bodes well. As a result, demand for Vulcan Materials’ products is likely to rise, which will drive revenues.
Coming to the segments, Aggregates segment sales (accounting for more than 78% of total revenues) will fall 1.5% in the quarter, per the Zacks Consensus Estimate. Nevertheless, in the first quarter, revenues are expected to grow 26% year over year in the asphalt segment, per the Zacks Consensus Estimate. Concrete segment revenues are projected to rise 10% in the to-be-reported quarter. Also, Calcium segment revenues are likely to be up 5.8% in the to-be-reported quarter.
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $798.6 million, up 1.4% year over year.
Earnings to Decline
Increased cost that includes freight distribution costs, rise in the unit cost of diesel fuel and storm-related costs is anticipated to hurt margins. The tepid sales growth along with increased costs is likely to dent earnings. Earnings are estimated at 22 cents, reflecting year-over-year decline of 34.3%.
Vulcan Materials Company Price, Consensus and EPS Surprise
Per our proven model, Vulcan Materials will not beat estimates in the to-be-reported quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Zacks ESP: The Earnings ESP is +2.68%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Vulcan has a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Vulcan’s earnings estimates for the quarter declined 7 cents over the last 30 days, reflecting analysts’ pessimism surrounding the earnings growth of the company.
Peer Releases
PulteGroup Inc. (PHM - Free Report) reported impressive first-quarter 2018 results, with earnings and revenues beating the Zacks Consensus Estimate.
NVR, Inc. (NVR - Free Report) also reported solid first-quarter 2018 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Lennar Corporation (LEN - Free Report) surpassed earnings and revenue expectations in the first quarter of fiscal 2018. Its top and bottom line grew considerably on higher orders along with improved gross margins and SG&A expenses.
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Will Inclement Weather Hurt Vulcan's (VMC) Q1 Earnings?
Vulcan Materials (VMC - Free Report) is set to release first-quarter 2018 results on May 3, before the opening bell.
In the last reported quarter, the company delivered a positive earnings surprise of 12.8%. Notably, the company surpassed the Zacks Consensus Estimate in three of the last four quarters, the average earnings beat being 10.1%.
Let’s see how things are shaping up prior to this announcement.
Adverse weather conditions in many markets might mar Vulcan’s results in the to-be-reported quarter, thanks to shipment delays. Vulcan Materials is susceptible to bad weather conditions as most of its products are used outdoors in the public or private construction industry. Also, the company’s production and distribution facilities are located outdoors. Inclement weather affects the company’s ability to produce and distribute products. It also has a negative impact on demand as construction work can be hampered by weather. The first and fourth quarters are most affected by winter. Hurricanes in the Atlantic Ocean and Gulf Coast are prevalent during these periods.
Weak Top-Line Growth
Though adverse weather conditions is expected to mar growth prospects in the quarter, Vulcan’s various bolt-on acquisitions can be expected to provide some cushion to revenues. Moreover, improvement in private construction activities, especially private residential construction, bodes well. As a result, demand for Vulcan Materials’ products is likely to rise, which will drive revenues.
Coming to the segments, Aggregates segment sales (accounting for more than 78% of total revenues) will fall 1.5% in the quarter, per the Zacks Consensus Estimate. Nevertheless, in the first quarter, revenues are expected to grow 26% year over year in the asphalt segment, per the Zacks Consensus Estimate. Concrete segment revenues are projected to rise 10% in the to-be-reported quarter. Also, Calcium segment revenues are likely to be up 5.8% in the to-be-reported quarter.
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $798.6 million, up 1.4% year over year.
Earnings to Decline
Increased cost that includes freight distribution costs, rise in the unit cost of diesel fuel and storm-related costs is anticipated to hurt margins. The tepid sales growth along with increased costs is likely to dent earnings. Earnings are estimated at 22 cents, reflecting year-over-year decline of 34.3%.
Vulcan Materials Company Price, Consensus and EPS Surprise
Vulcan Materials Company Price, Consensus and EPS Surprise | Vulcan Materials Company Quote
Quantitative Model Prediction
Per our proven model, Vulcan Materials will not beat estimates in the to-be-reported quarter. This is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.
Zacks ESP: The Earnings ESP is +2.68%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Vulcan has a Zacks Rank #4 (Sell). Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revision.
Vulcan’s earnings estimates for the quarter declined 7 cents over the last 30 days, reflecting analysts’ pessimism surrounding the earnings growth of the company.
Peer Releases
PulteGroup Inc. (PHM - Free Report) reported impressive first-quarter 2018 results, with earnings and revenues beating the Zacks Consensus Estimate.
NVR, Inc. (NVR - Free Report) also reported solid first-quarter 2018 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.
Lennar Corporation (LEN - Free Report) surpassed earnings and revenue expectations in the first quarter of fiscal 2018. Its top and bottom line grew considerably on higher orders along with improved gross margins and SG&A expenses.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>