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Martin Marietta (MLM) to Post Q2 Earnings: What to Expect?

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Martin Marietta Materials, Inc. (MLM - Free Report) is scheduled to report second-quarter 2022 results on Jul 28, before the opening bell.

In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 47.1% but revenues (products and services) beat the same by 2.6%. On a year-over-year basis, earnings of this aggregates producer decreased 62.5%, and products and services revenues rose 24.5%. Total quarterly revenues (including Product and Services and Freight revenues) were up 25.3% from the year-ago figure.

Martin Marietta’s earnings topped the consensus mark in one of the last four quarters and missed on the other three occasions, with the average negative surprise being 10.2%.

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter earnings has decreased to $3.79 from $3.85 per share over the past seven days. The estimated figure suggests a 0.5% decrease from $3.81 per share reported in the year-ago period. The consensus mark for revenues is pegged at $1.48 billion, which calls for 14.3% growth from the prior-year reported figure.

Factors to Note

Martin Marietta’s quarterly revenues are expected to have witnessed year-over-year growth in the second quarter, given the solid product demand and pricing gains across all product lines. Improved visibility in non-residential construction, organic aggregates and cement shipment growth and contributions from 2021 acquisitions are also likely to have been the positives.

Infrastructure construction, particularly for aggregates intensive highways and roads and streets, might have also contributed to its performance in the quarter, as contractors advanced projects that have been awarded and funded. Also, resilient pricing, given growth in all product lines, may have been a positive.

The business and earnings of MLM 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 revenues.

Overall, higher pricing in upstream aggregates and cement businesses as well as disciplined cost management throughout the business are likely to aid quarterly results.

However, inflation from hydrocarbon, rising liquid asphalt and diesel fuel costs, more transportation costs and insurance and labor cost may have impacted the bottom line.

Other Projections

The Zacks Consensus Estimate for the Building Material segment revenues (product and services), which comprise 95% of total revenues, is pegged at $1,419 million, implying 15.8% growth from a year ago.

The consensus estimate for Magnesia Specialties revenues (product and services) is currently pegged at $68 million. This suggests a year-over-year decline from $70 million.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Martin Marietta 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: Martin Marietta has an Earnings ESP of -1.75%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are a few companies 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.

Lennox International Inc. (LII - Free Report) has an Earnings ESP of +3.01% and carries a Zacks Rank #3.

The earnings of LII topped the consensus mark in three of the last four quarters but missed on one occasion, with the average surprise being 2.3%.

Watsco, Inc. (WSO - Free Report) has an Earnings ESP of +4.32% and holds a Zacks Rank #3.

The earnings of WSO topped the consensus mark in all of the last four quarters, with the average surprise being 24.3%.

KBR, Inc. (KBR - Free Report) has an Earnings ESP of +1.81% and a Zacks Rank #1.

The earnings of KBR topped the consensus mark in the last four quarters, with the average surprise being 12%.

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