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Factors Setting the Tone for Vulcan Materials' (VMC) Q3 Earnings

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

In the last reported quarter, the company’s adjusted earnings and revenues missed the Zacks Consensus Estimate by 6% and 0.7%, respectively. On a year-over-year basis, earnings declined 1.9% but revenues increased 2.9%.

Vulcan Materials’ earnings topped the consensus mark in two of the last four quarters and missed the same on the other two occasions, with the average surprise being 16.5%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised downward to $1.65 per share from $1.70 over the past 30 days. Nonetheless, this indicates an increase of 5.8% from the year-ago quarter. The consensus estimate for revenues is pegged at $1.46 billion, suggesting 11.3% 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

Solid momentum in residential and nonresidential construction activities is expected to have benefited Vulcan Materials’ third-quarter performance. Also, resilient pricing — given growth in all product lines — is expected to have supported growth.

Also, 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. Vulcan Materials closed the previously announced acquisition of U.S. Concrete, thereby enhancing its aggregates-led business with additional geographic reach. U.S. Concrete is now a wholly-owned subsidiary of Vulcan. This buyout is expected to have aided its top line, while weighing on margins.

Weather-induced lower shipments and higher diesel fuel costs may have been risks. Similar to other aggregates and cement producers, Vulcan Materials is expected to have witnessed weather-related woes in the third quarter, primarily in Texas and Arizona. Hence, wet weather conditions may have been a headwind. Also, inflation from hydrocarbon, rising liquid asphalt costs, 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 $1,140 million, indicating an increase from $1,049 million a year ago.

The consensus mark for net sales from the Concrete segment (accounting for 8% of total revenues) is $144 million, suggesting an increase from $103 million a year ago.

The Zacks Consensus Estimate for the same from the Asphalt Mix segment (17% of total revenues) is pegged at $249 million, indicating growth from $235 million a year ago.

The consensus mark for the Calcium segment’s net sales is $1.1 million, suggesting a decrease from $1.35 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 -0.63%. 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.

Jacobs Engineering Group Inc. (J - Free Report) has an Earnings ESP of +6.49% and a Zacks Rank #2.

Fluor Corporation (FLR - Free Report) has an Earnings ESP of +12.50% and carries a Zacks Rank #3.

Thor Industries, Inc. (THO - Free Report) has an Earnings ESP of +3.13% and sports a Zacks Rank #1.