Back to top

Image: Bigstock

Vulcan Materials (VMC) Stock Up on Q1 Earnings, Revenue Beat

Read MoreHide Full Article

Vulcan Materials Company (VMC - Free Report) reported first-quarter 2022 results, with earnings and revenues beating the Zacks Consensus Estimate and increasing year over year. Strong residential construction, recovering private non-residential construction, solid infrastructure investment and favorable pricing dynamics drove the quarter’s growth.

Shares of the nation’s largest producer of construction aggregates edged up 1.7% in the pre-market trading session following first-quarter results.

Looking ahead, chairman and CEO Tom Hill said, "We remain confident in our full-year outlook and our ability to deliver strong earnings growth in 2022. Through robust growth in aggregates pricing and a relentless focus on operational excellence, we can continue to expand unit profitability, despite the macro challenges.”

Inside the Headlines

Adjusted earnings of 73 cents per share beat the consensus mark of 62 cents by 17.7%. The company’s bottom line also advanced 5.8% from the year-ago level.

Total revenues of $1,540.7 million surpassed the consensus mark of $1,421 million by 8.4% and increased 44.2% year over year. This upside was led by the acquisition of U.S. Concrete operations and strong growth in the aggregates business.

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

Segments in Detail

Aggregates

Revenues from the segment increased 25.3% year over year to $1,121.2 million, owing to higher demand across all end-market segments. Aggregate shipments (volumes) increased 14.2% year over year (up 7% on a same-store basis). Strong demand and a positive pricing environment across the globe supported growth. This depicts growth in both private and public construction activity.

For the quarter, freight-adjusted average sales price inched up 6% (7% on a mix-adjusted basis) from the prior-year level. Freight-adjusted revenues also rose 20.8% from the prior-year quarter to $822.7 million.

Gross profit of $243 million was up 9% year over year, backed by strong volume and price as well as effective cost-control measures.

Asphalt, Concrete and Calcium

Revenues from the Asphalt segment were $167.1 million, up 13.5% year over year. The segment generated a gross loss of $2.9 million compared with a gross loss of $3 million a year ago. This was mainly due to higher costs for liquid asphalt (high by 33%). Asphalt mix pricing grew 13% year over year. Volumes grew 5% driven by growth in Arizona, California and Tennessee.

Total revenues from the Concrete segment were $360.5 million, up 343.4% year over year. Further, gross profit totaled $28 million, up 250% year over year. The upside was attributable to higher shipments and price growth in its legacy operations as well as the contribution from USCR operations. Shipments grew 307.8% year over year and average selling prices increased 9.3% from the prior-year level.

Total revenues from the Calcium segment were down from the prior-year figure of $2.1 million to $1.9 million. The segment reported a gross profit of $0.7 million, down from $0.9 million a year ago.

Operating Highlights

Selling, administrative and general expenses — as a percentage of total revenues — declined 60 basis points to 7.7% for the quarter. Adjusted EBITDA was up 20.3% year over year to $293.9 million.

Financials

As of Mar 31, 2022, cash and cash equivalents were $123.1 million, down from $235 million at 2021-end. Long-term debt was $3,874.5 million at March-end, in line with $3,874.8 million at 2021-end.

2022 Guidance

For 2022, the company still anticipates adjusted EBITDA in the range of $1.720-$1.820 billion. Net earnings are expected within $800-$890 million and aggregates shipment growth is anticipated to be 5-7%. The company expects double-digit earnings growth for 2022.

Zacks Rank

Vulcan Materials currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Few Recent Construction Releases

Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed first-quarter 2022 results, wherein earnings missed the Zacks Consensus Estimate but revenues (products and services) beat the same.

Although MLM’s first-quarter revenues increased on a year-over-year basis backed by improved pricing across businesses and higher demand, earnings declined due to ongoing higher cost inflation.

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 to 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.