Back to top

Image: Bigstock

Vulcan Materials (VMC) to Post Q1 Earnings: What to Expect?

Read MoreHide Full Article

Vulcan Materials Company (VMC - Free Report) is scheduled to release first-quarter 2022 results on May 4, before the opening bell.

In the last reported quarter, the company’s adjusted earnings beat the Zacks Consensus Estimate by 5.9% and revenues beat the same by 1.5%. On a year-over-year basis, earnings grew 16.8% and revenues increased 36.7%.

Vulcan Materials’ earnings topped the consensus mark in two of the last four quarters and missed the same on other two occasions, with the average surprise being 15.4%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised downward to 62 cents from 71 cents over the past 30 days. This indicates a decrease of 10.1% from the year-ago quarter. The consensus estimate for revenues is pegged at $1.41 billion, suggesting 32.1% year-over-year growth.

Factors to Note

Higher residential construction activities is expected to have benefited Vulcan Materials’ first-quarter performance. Apart from this, non-residential recovery and incremental federal funding from the recently enacted Infrastructure Investment and Jobs Act should have acted as a tailwind. Also, resilient pricing — given growth in all product lines — is expected to have supported growth.

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. 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.

Yet, higher diesel and fuel costs may have been risks. Inflation from hydrocarbons, 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 72% of total revenues) is pegged at $1,006 million, indicating an increase from $895 million a year ago.
The consensus mark for net sales from the Concrete segment (accounting for 13.8% of total revenues) is $347 million, suggesting a massive increase from $81 million a year ago.

The Zacks Consensus Estimate for the same from the Asphalt Mix segment (14% of total revenues) is pegged at $159 million, indicating growth from $147 million a year ago.

The consensus mark for the Calcium segment’s net sales is $2.05 million, suggesting a decrease from $2.06 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 -8.71%. 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.

Stock With Favorable Combination

Here is a company in the Zacks Construction sector, which according to our model, has the right combination of elements to post an earnings beat in their respective quarters to be reported.

Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +1.87% and a Zacks Rank #3.

LPX’s earnings topped the consensus mark in all the last four quarters, with the average being 13.3%.

A Few Recent Construction Releases

United Rentals, Inc. (URI - Free Report) reported better-than-expected first-quarter 2022 results. Better fleet productivity on broad-based rental demand in construction and industrial verticals, higher total and rental revenues, and stronger pricing helped the company start 2022 on a solid note.

URI also lifted its full-year guidance for total revenues, adjusted EBITDA and free cash flow, given customer sentiments and solid project activity.

NVR, Inc. (NVR - Free Report) reported first-quarter 2022 results, with earnings and revenues beating the respective Zacks Consensus Estimate and increasing year over year.

NVR’s first-quarter results benefited from a higher average price of settlements and lower lumber prices.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in