Back to top

Image: Bigstock

Martin Marietta (MLM) to Post Q1 Earnings: What's in Store?

Read MoreHide Full Article

Martin Marietta Materials, Inc. (MLM - Free Report) is scheduled to report first-quarter 2021 results on May 4, before the opening bell.

In the last reported quarter, the company’s earnings and revenues (products and services) topped the Zacks Consensus Estimate by 28.5% and 5.8%, respectively. On a year-over-year basis, earnings of this aggregates producer grew 40.2% and products and services revenues gained 8.4%. Total quarterly revenues (including Product and Services, and Freight revenues) came in at $1.18 billion, up 7.2% from the year-ago figure of $1.1 billion.

Martin Marietta’s earnings topped the consensus mark in three of the last four quarters and missed the same on the other occasion, with the average surprise being 10.5%.

Trend in Estimate Revision

The Zacks Consensus Estimate for first-quarter earnings has decreased to 51 cents from 52 cents per share over the past seven days. Nonetheless, the estimated figure suggests a 24.3% increase from 41 cents per share reported in the year-ago period. The consensus mark for revenues is pegged at $938 million, which calls for 5.3% growth from the prior-year reported figure.

Factors to Note

Martin Marietta’s earnings and revenues are expected to have witnessed year-over-year growth in the first quarter. Infrastructure construction — particularly for aggregates intensive highways, roads and streets — is expected to have remained resilient in the quarter, as contractors advanced projects that have been awarded and funded. Overall, strengthening of the housing market and improvements in the non-residential market are expected to have driven demand. Also, resilient pricing — given growth in all product lines — are expected to have supported growth.

The company’s business and earnings have been sensitive to changes in construction spending, particularly housing and public construction in Texas, Colorado, North Carolina, Georgia, Florida as well as Iowa. Higher spending from a number of states that it serves is likely to have aided the company’s revenues.

Similar to the other aggregates and cement producers, Martin Marietta is expected to have witnessed weather-related woes in the first quarter, primarily in Texas. So, inclement weather conditions in February may have been a headwind. Also, inflation from hydrocarbon, insurance and labor may have added to the negatives. Again, higher operating costs, particularly in cement (higher fixed costs), may have been a risk.

Overall, despite mixed volumes, pricing (strongest in aggregates) and a favorable cost environment (including lower diesel) are likely to have supported its margins. Although limited visibility in nonresidential construction may have been a concern, strong residential construction and healthier DOT spending than originally expected are likely to have been positives.

Other Projections

The Zacks Consensus Estimate for the Building Material segment revenues — which comprises 95% of total revenues — is pegged at $896 million, implying 7.8% growth from a year ago.

The consensus estimate for Magnesia Specialties revenues is currently pegged at $67 million. This suggests an increase from $60 million in the prior-year quarter.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Martin Marietta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Martin Marietta has an Earnings ESP of +8.47%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

AECOM (ACM - Free Report) has an Earnings ESP of +2.93% and a Zacks Rank #3.

Summit Materials, Inc. (SUM - Free Report) has an Earnings ESP of +9.43% and a Zacks Rank #3.

Eagle Materials Inc. (EXP - Free Report) has an Earnings ESP of +8.50% and a Zacks Rank #3.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>