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Vulcan Materials (VMC) Q3 Earnings & Revenues Miss Estimates

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Vulcan Materials Company (VMC - Free Report) reported third-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate after beating the same in the preceding two quarters. Both the metrics also declined year over year. The company’s results in the quarter were impacted by the coronavirus pandemic and wet weather, which led to lower shipment levels in the quarter.

Inside the Headlines

Vulcan Materials — which is one of the largest producers of construction aggregates — reported adjusted earnings of $1.56 per share, which missed the consensus mark of $1.63. Further, the company’s bottom line declined 7.1%.

Total revenues of $1,309.9 million lagged the consensus mark of $1,376 million and declined 7.2% year over year.

Segments in Detail

Aggregates

Revenues from the segment decreased 7.4% year over year to $1,048.9 million due to lower shipments.

Aggregate shipments (volumes) were down 8% year over year as shipping patterns varied widely across the company's footprint as a result of economic uncertainty. Also, wet weather and wildfires in major markets added to woes.

During the quarter under review, freight-adjusted average sales price increased 2% from the prior-year quarter. Freight-adjusted revenues also declined 5.9% from the prior-year quarter to $858.5 million.

Gross profit of $337.9 million was down 5.4% year over year. Adjusted gross margin — as a percentage of segment sales — improved 10 basis points (bps) to 41% (excluding freight & delivery).

Vulcan Materials Company Price, Consensus and EPS Surprise Vulcan Materials Company Price, Consensus and EPS Surprise

Vulcan Materials Company price-consensus-eps-surprise-chart | Vulcan Materials Company Quote

Asphalt, Concrete and Calcium

Revenues from the Asphalt segment were $235.2 million, down 13% year over year. The segment reported gross profit of $30.2 million, up 9.3% from the year-ago quarter driven by increase in material margin. Although asphalt volumes for the quarter declined 13% from a year ago, it benefited from marginal increase in prices and cost containment.

Total revenues from the Concrete segment were $102.8 million, down 9% year over year. However, gross profit totaled $12 million, up 20% year over year. Shipments were down 11% year over year. Average selling prices grew 3% year over year.

Total revenues from the Calcium segment were down 36% from the prior-year figure to $1.4 million. The segment reported gross profit of $0.2 million, down 69.5% from the prior-year quarter.

Operating Highlights

Selling, Administrative and General or SAG expenses — as a percentage of total revenues — increased 10 bps in the quarter. Adjusted EBIT was down 2.6% from the prior-year quarter to $308.3 million.

Adjusted EBITDA was also down 0.8% year over year to $403.5 million.

Financials

As of Sep 30, 2020, cash and cash equivalents were $1,084.1 million, up from $90.4 million in the comparable year-ago period and $271.6 million at 2019-end. Long-term debt was $2.77 billion, slightly down from the year-ago quarter and 2019-end.
    
During the reported quarter, Vulcan Materials returned $135 million to shareholders through dividends, reflecting an increase of 10% from the prior year. So far this year, the company has repurchased $26 million in common stock.

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Despite the fact that the economic environment is showing signs of improvement, the pandemic’s effect on demand and the broader economy remains uncertain. The company anticipates adjusted EBITDA in the range of $1.285 billion to $1.315 billion in 2020. The company is optimistic about the pricing environment in 2021.

Zacks Rank & a Peer Release

Vulcan Materials — which shares space with Summit Materials, Inc. (SUM - Free Report) and Eagle Materials Inc. (EXP - Free Report) in the Zacks Building Products - Concrete and Aggregates industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed third-quarter 2020 results, wherein earnings topped the Zacks Consensus Estimate but revenues (products and services) lagged the same. Increased pricing strategy and prudent cost management helped the company offset lower shipments.

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