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Vulcan (VMC) Up 8.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Vulcan Materials (VMC - Free Report) . Shares have added about 8.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vulcan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Vulcan Materials Company reported third-quarter 2022 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate.
The nation’s largest producer of construction aggregates has been witnessing consistent growth in aggregates unit profitability, solid contributions from acquisitions, and a positive pricing environment, despite ongoing volatility in the macro environment and slowdown in single-family residential demand. However, higher diesel fuel costs and inflationary pressures for many other parts and supplies weighed on the bottom line.
Looking ahead, chairman and CEO Tom Hill said, “As we look ahead to 2023, leading indicators suggest that growing public construction activity, particularly highways, and the recovery in private nonresidential contract awards should help to offset contracting single-family residential demand. The pricing environment remains positive, and we carry strong momentum into 2023.”
Inside the Headlines
Adjusted earnings of $1.78 per share beat the consensus mark of $1.71. The company’s bottom line grew 15.6% from the year-ago level.
Total revenues of $2,088.3 million surpassed the consensus mark of $1,999 million by 4.5% and increased 37.7% year over year. This upside was led by double-digit growth in the company's legacy operations as well as the addition of acquired businesses.
Segments in Detail
Aggregates: Revenues from the segment increased 27.1% year over year to $1,490.5 million, owing to higher demand across all end-market segments. Aggregate shipments (volumes) increased 9% year over year (up 3% on a same-store basis). Strong demand across the company’s geographies (mainly strong in many southeastern markets and California) led to a positive pricing environment.
For the quarter, freight-adjusted average sales price inched up 12% (12% on a mix-adjusted basis) from the prior-year level. Freight-adjusted revenues also rose 22.2% from the prior-year quarter to $1,097.2 million.
Gross profit of $436.1 million was up 17.1% year over year, backed by price growth and solid operational execution, offsetting cost headwinds that include higher diesel fuel costs and inflationary pressures for many other parts and supplies.
Asphalt, Concrete and Calcium
Revenues from the Asphalt segment were $310.2 million, up 40.6% year over year. The segment generated a gross profit of $29.5 million compared with $7.1 million a year ago. Volumes grew 13%, driven by growth in Arizona and California, the company's largest two asphalt markets. Asphalt pricing was up 26%. This was offset by higher pricing for liquid asphalt (high by 42%) and $3 million year-over-year increase in natural gas cost.
Total revenues from the Concrete segment were $450.5 million, up 105.5% year over year. Further, gross profit totaled $26.5 million, up from $14.3 million a year ago. The upside was attributable to higher shipments and price growth in its legacy operations, as well as the contribution from USCR operations. Shipments grew 83.2% year over year, and average selling prices increased 12.7% from the prior-year level.
Total revenues from the Calcium segment were up from the prior-year figure of $1.5 million to $2.1 million. The segment reported a gross profit of $0.8 million, up from $0.3 million a year ago.
Operating Highlights
Selling, administrative and general expenses — as a percentage of total revenues — improved to 6.5% from 6.8% a year ago. Adjusted EBITDA was up 21.4% year over year to $507 million.
Financials
As of Sep 30, 2022, cash and cash equivalents were $122.4 million, down from $235 million at 2021-end. Long-term debt was $3,874.2 million at September-end, almost in line with $3,874.8 million at 2021-end.
2022 Guidance Updated
For 2022, the company anticipates adjusted EBITDA in the range of $1.64-$1.68 billion versus $1.60-$1.70 billion expected earlier.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Vulcan has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vulcan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Vulcan (VMC) Up 8.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Vulcan Materials (VMC - Free Report) . Shares have added about 8.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vulcan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Vulcan Materials Q3 Earnings & Revenues Beat Estimates
Vulcan Materials Company reported third-quarter 2022 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate.
The nation’s largest producer of construction aggregates has been witnessing consistent growth in aggregates unit profitability, solid contributions from acquisitions, and a positive pricing environment, despite ongoing volatility in the macro environment and slowdown in single-family residential demand. However, higher diesel fuel costs and inflationary pressures for many other parts and supplies weighed on the bottom line.
Looking ahead, chairman and CEO Tom Hill said, “As we look ahead to 2023, leading indicators suggest that growing public construction activity, particularly highways, and the recovery in private nonresidential contract awards should help to offset contracting single-family residential demand. The pricing environment remains positive, and we carry strong momentum into 2023.”
Inside the Headlines
Adjusted earnings of $1.78 per share beat the consensus mark of $1.71. The company’s bottom line grew 15.6% from the year-ago level.
Total revenues of $2,088.3 million surpassed the consensus mark of $1,999 million by 4.5% and increased 37.7% year over year. This upside was led by double-digit growth in the company's legacy operations as well as the addition of acquired businesses.
Segments in Detail
Aggregates: Revenues from the segment increased 27.1% year over year to $1,490.5 million, owing to higher demand across all end-market segments. Aggregate shipments (volumes) increased 9% year over year (up 3% on a same-store basis). Strong demand across the company’s geographies (mainly strong in many southeastern markets and California) led to a positive pricing environment.
For the quarter, freight-adjusted average sales price inched up 12% (12% on a mix-adjusted basis) from the prior-year level. Freight-adjusted revenues also rose 22.2% from the prior-year quarter to $1,097.2 million.
Gross profit of $436.1 million was up 17.1% year over year, backed by price growth and solid operational execution, offsetting cost headwinds that include higher diesel fuel costs and inflationary pressures for many other parts and supplies.
Asphalt, Concrete and Calcium
Revenues from the Asphalt segment were $310.2 million, up 40.6% year over year. The segment generated a gross profit of $29.5 million compared with $7.1 million a year ago. Volumes grew 13%, driven by growth in Arizona and California, the company's largest two asphalt markets. Asphalt pricing was up 26%. This was offset by higher pricing for liquid asphalt (high by 42%) and $3 million year-over-year increase in natural gas cost.
Total revenues from the Concrete segment were $450.5 million, up 105.5% year over year. Further, gross profit totaled $26.5 million, up from $14.3 million a year ago. The upside was attributable to higher shipments and price growth in its legacy operations, as well as the contribution from USCR operations. Shipments grew 83.2% year over year, and average selling prices increased 12.7% from the prior-year level.
Total revenues from the Calcium segment were up from the prior-year figure of $1.5 million to $2.1 million. The segment reported a gross profit of $0.8 million, up from $0.3 million a year ago.
Operating Highlights
Selling, administrative and general expenses — as a percentage of total revenues — improved to 6.5% from 6.8% a year ago. Adjusted EBITDA was up 21.4% year over year to $507 million.
Financials
As of Sep 30, 2022, cash and cash equivalents were $122.4 million, down from $235 million at 2021-end. Long-term debt was $3,874.2 million at September-end, almost in line with $3,874.8 million at 2021-end.
2022 Guidance Updated
For 2022, the company anticipates adjusted EBITDA in the range of $1.64-$1.68 billion versus $1.60-$1.70 billion expected earlier.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Vulcan has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vulcan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.