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Vulcan Materials (VMC) to Post Q2 Earnings: What's in Store?

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Vulcan Materials Company (VMC - Free Report) is scheduled to release second-quarter 2021 results on Aug 4, before the opening bell.

In the last reported quarter, the company’s adjusted earnings and revenues beat the Zacks Consensus Estimate by 68.3% and 5.5%, respectively. On a year-over-year basis, earnings and revenues increased 46.8% and 1.8%, respectively.

Vulcan Materials’ earnings topped the consensus mark in three of the last four quarters and missed the same on another occasion, with the average surprise being 22%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised downward by 4.6% over the past 30 days to $1.67. Nonetheless, this indicates an increase of 4.4% from the year-ago quarter. The consensus estimate for revenues is pegged at $1.37 billion, suggesting 3.6% year-over-year growth.

Vulcan Materials Company Price and EPS Surprise

Vulcan Materials Company Price and EPS Surprise

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

Factors to Note

Vulcan Materials is expected to have generated higher earnings and revenues on a year-over-year basis in the second quarter, given improvements in residential as well as nonresidential end markets. Also, resilient pricing — given growth in all product lines — is expected to have supported growth.

Nonetheless, strong residential construction activity is likely to have supported the company’s top line. Higher spending from a number of states that it serves is likely to have aided revenues. The Aggregates business (including crushed stone, sand and gravel, along with other aggregates) has been a major contributor to revenue growth.

Also, efforts to enhance operational excellence, acquisition synergies and cost-control measures are expected to have aided the bottom line to some extent.

However, weather-induced lower shipments and higher diesel fuel costs may have been risks. Similar to the other aggregates and cement producers, Vulcan Materials is expected to have witnessed weather-related woes in the second quarter, primarily in Texas. Hence, wet weather conditions during the spring season may have been a headwind. Also, inflation from hydrocarbon, insurance and labor might have added to the negatives.

Other Projections

The Zacks Consensus Estimate for net sales from the Aggregates segment (accounting for 81% of total revenues) is pegged at $1,097 million, indicating an increase from $1,071 million a year ago.

The consensus mark for net sales from the Concrete segment (accounting for 8% of total revenues) is $102 million, suggesting an increase from $101 million a year ago.

The Zacks Consensus Estimate for the same from the Asphalt Mix segment (17% of total revenues) is pegged at $240 million, indicating 7.6% growth from $223 million a year ago.

The consensus mark for Calcium segment’s net sales is $1.97 million, suggesting an increase from $1.89 million a year ago.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Vulcan this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -1.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some 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.

Primoris Services Corporation (PRIM - Free Report) has an Earnings ESP of +0.96% and a Zacks Rank #3.

Quanta Services, Inc. (PWR - Free Report) has an Earnings ESP of +10.32% and a Zacks Rank #2.

Peer Release

Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed second-quarter 2021 results, wherein earnings missed the Zacks Consensus Estimate but revenues (products and services) beat the same.