Vulcan Materials Company’s (VMC - Free Report) first-quarter 2017 adjusted earnings of 34 cents per share comfortably beat the Zacks Consensus Estimate of 22 cents by 54.5%. However, the bottom line decreased 17.1% from the prior-year quarter.
Total revenue of $787.3 million also surpassed the Zacks Consensus Estimate of $756.4 million by 4.1%. Sales also increased 4% from the prior-year quarter.
Segment Details
Aggregates
Revenues increased 2% year over year to $650.3 million. Freight-adjusted revenues increased 2% year over year to $496.8 million.
Aggregates shipments (volumes) decreased 2% due to California's wet weather. This along with flooding halted construction activity and impaired shipments in January and February. Both these months faced a decline in daily shipping rates for aggregates with more than 20% against the prior-year period.
Adjusted gross profit margin of 28.2% decreased 230 basis points (bps) compared with the prior-year quarter.
Non-Aggregates
Revenues at the Asphalt Mix segment were $95.8 million, up 7.5% owing to an increase in volumes. Asphalt segment gross profit was $8.6 million, down $3.6 million year over year owing to lower material margins and acquisition-related costs. Volumes increased 5%. However, segment results were adversely impacted by severe wet weather and flooding conditions in California, Vulcan’s largest asphalt market.
Total revenue at the Concrete segment was $88.8 million, up 26.1% year over year. Concrete segment gross profit was $10.5 million in the quarter compared with $3.5 million in the prior-year quarter. Sales volumes increased 22% from the prior-year quarter driven by increased volumes in each of the company's concrete markets.
Total revenue at the Calcium segment (formerly Cement) was $1.9 million, reflecting a decrease of 1.3% from the prior-year quarter. The segment reported gross profit of $0.7 million compared with $0.6 million in the prior-year quarter.
Margin
Adjusted gross margin of 23.9% decreased 210 bps in the first quarter. Adjusted EBITDA decreased 4% year over year to $149.3 million.
Financials
As of Mar 31, 2017, cash and cash equivalents were $287 million, up from $259 million at the end of 2016. During the first quarter, the company returned $82 million to shareholders through dividends and share repurchases. Total debt as of Mar 31, 2017 was 2.3 billion.
2017 Guidance Reaffirmed
Adjusted EBITDA is expected in the range of $1.125–$1.225 billion.
Aggregates shipments growth is expected in the range of 5–8% from 2016. The growth is expected 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 increased level of shipments and bring down production costs and boost operating efficiencies.
Vulcan Materials carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
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.
Masco Corporation’s (MAS - Free Report) adjusted earnings of 41 cents per share in the first quarter of 2017 surpassed the Zacks Consensus Estimate of 35 cents by 17.1%. Adjusted earnings increased 28.1% year over year.
D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the second quarter of fiscal 2017, with both earnings and revenues beating the Zacks Consensus Estimate by 1.7% and 5.2%, respectively.
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Vulcan Materials Company’s (VMC - Free Report) first-quarter 2017 adjusted earnings of 34 cents per share comfortably beat the Zacks Consensus Estimate of 22 cents by 54.5%. However, the bottom line decreased 17.1% from the prior-year quarter.
Total revenue of $787.3 million also surpassed the Zacks Consensus Estimate of $756.4 million by 4.1%. Sales also increased 4% from the prior-year quarter.
Segment Details
Aggregates
Revenues increased 2% year over year to $650.3 million. Freight-adjusted revenues increased 2% year over year to $496.8 million.
Aggregates shipments (volumes) decreased 2% due to California's wet weather. This along with flooding halted construction activity and impaired shipments in January and February. Both these months faced a decline in daily shipping rates for aggregates with more than 20% against the prior-year period.
Adjusted gross profit margin of 28.2% decreased 230 basis points (bps) compared with the prior-year quarter.
Non-Aggregates
Revenues at the Asphalt Mix segment were $95.8 million, up 7.5% owing to an increase in volumes. Asphalt segment gross profit was $8.6 million, down $3.6 million year over year owing to lower material margins and acquisition-related costs. Volumes increased 5%. However, segment results were adversely impacted by severe wet weather and flooding conditions in California, Vulcan’s largest asphalt market.
Total revenue at the Concrete segment was $88.8 million, up 26.1% year over year. Concrete segment gross profit was $10.5 million in the quarter compared with $3.5 million in the prior-year quarter. Sales volumes increased 22% from the prior-year quarter driven by increased volumes in each of the company's concrete markets.
Total revenue at the Calcium segment (formerly Cement) was $1.9 million, reflecting a decrease of 1.3% from the prior-year quarter. The segment reported gross profit of $0.7 million compared with $0.6 million in the prior-year quarter.
Margin
Adjusted gross margin of 23.9% decreased 210 bps in the first quarter. Adjusted EBITDA decreased 4% year over year to $149.3 million.
Financials
As of Mar 31, 2017, cash and cash equivalents were $287 million, up from $259 million at the end of 2016. During the first quarter, the company returned $82 million to shareholders through dividends and share repurchases. Total debt as of Mar 31, 2017 was 2.3 billion.
2017 Guidance Reaffirmed
Adjusted EBITDA is expected in the range of $1.125–$1.225 billion.
Aggregates shipments growth is expected in the range of 5–8% from 2016. The growth is expected 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 increased level of shipments and bring down production costs and boost operating efficiencies.
Vulcan Materials carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
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.
Masco Corporation’s (MAS - Free Report) adjusted earnings of 41 cents per share in the first quarter of 2017 surpassed the Zacks Consensus Estimate of 35 cents by 17.1%. Adjusted earnings increased 28.1% year over year.
D.R. Horton, Inc. (DHI - Free Report) exhibited an impressive performance in the second quarter of fiscal 2017, with both earnings and revenues beating the Zacks Consensus Estimate by 1.7% and 5.2%, respectively.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
Click here for a peek at this private information >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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