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Martin Marietta (MLM) Q2 Earnings & Revenues Beat, '23 View Up
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Martin Marietta Materials, Inc.’s (MLM - Free Report) shares jumped 3.97% in the pre-market trading session on Jul 27 after it reported mixed results for second-quarter 2023. Earnings remarkably surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. Revenues missed the consensus mark but rose from the prior-year period.
The company has been gaining from the inflow of public funds for infrastructure and manufacturing activities. Owing to this tailwind, Martin Marietta expects a significant boost in aggregate demand in the U.S. economy during the latter part of 2023. This surge in investment is expected to largely counterbalance the current downturn in residential construction, which is predicted to reach its lowest point in the third quarter of 2023.
Given solid second-quarter results and expectations for an even stronger next six months, the company also lifted its full-year adjusted EBITDA expectation.
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise
Martin Marietta reported adjusted earnings from continuing operations of $5.60 per share, which handily surpassed the Zacks Consensus Estimate of $4.83 by 15.9%. Also, the metric increased by 41.4% from the year-ago quarter’s adjusted level of $3.96.
Quarterly revenues were $1.82 billion, up 10.9% from the year-ago period. The metric missed the consensus mark of $1.83 billion by 0.3%.
Segmental Discussion
Building Materials (including aggregates, cement, ready-mixed concrete, asphalt, paving product lines and Freight) reported revenues of $1.74 billion, which increased 11.6% year over year. Pricing gains led to the gross margin improvement of 520 basis points (bps).
Within the Building Materials’ product and services umbrella, Aggregates’ revenues rose 8.9% of $1.15 billion from the year-ago quarter. Cement revenues rose 21.7% year over year to $197.7 million. Ready Mixed Concrete’s revenues grew 19.7% year over year to $271.4 million. Revenues in Asphalt and Paving product lines increased 11.7% from the year-ago quarter to $240.9 million.
Aggregates shipments fell 5.7% year over year and pricing advanced 18.6%.
Cement shipments improved 0.2% year over year. Pricing increased 21.8% year over year. The Cement gross profit grew by a whopping 84% in the quarter from a year ago.
Within the Downstream business, ready mixed concrete shipments declined 1.7%, while Asphalt shipments grew 1.7% in the quarter.
Magnesia Specialties reported revenues of $80.5 million, down 1.5% year over year. Nonetheless, gross profit increased 13% to $27.7 million, given higher pricing and a moderation of energy expenses.
Operating Highlights
The gross profit increased 31.8% year over year to $560.4 million. The adjusted gross margin was 30.8%, which increased 490 bps a year ago. Adjusted EBITDA of $596.1 million increased 24.6% year over year.
Liquidity and Cash Flow
As of Jun 30, 2023, Martin Marietta had cash and cash equivalents and restricted cash of $421.5 million compared with $358 million at 2022-end. Also, it had $1.20 billion of unused borrowing capacity on its existing credit facilities at June-end. Long-term debt (excluding current maturities) was $4.343 billion, up slightly from $4.341 billion at 2022-end.
Net cash provided by operations was $518.5 million for the first six months, up from $286.2 million in the year-ago period.
2023 Guidance Raised
Martin Marietta now expects consolidated products and services revenues of $6,725-$6,860 million, up from $6,600-$6,815 million stated earlier. The company anticipates adjusted EBITDA between $2,000 million and $2,100 million compared with the prior projection of $1,800 million-$1,900 million.
Interest expenses are likely to be in the range of $165-170 million and the tax rate is projected to be 21-22%. Net earnings from continuing operations attributable to Martin Marietta are anticipated to be in the range of $1,040-$1,150 million. Capital expenditure is likely to be in the band of $575-625 million.
Within the Building Materials business, total aggregate shipment growth is expected to be between down 5% and down 1%. Total aggregate pricing per ton is anticipated to grow 17-19%. Gross profit is likely to be between $1,330 and $1,395 million.
Otis Worldwide Corporation’s (OTIS - Free Report) second-quarter 2023 earnings and sales surpassed the Zacks Consensus Estimate. Its quarterly results reflected 11th consecutive quarters of organic sales growth and solid operating margin expansion contributing to mid-single digit adjusted earnings per share growth.
The company remains focused on strong portfolio growth and generating a solid New Equipment backlog. It also intends to expand operating margins, return cash to shareholders through a capital-allocation strategy and pursue additional progress toward ESG goals.
Armstrong World Industries, Inc. (AWI - Free Report) reported mixed results for second-quarter 2023, wherein earnings surpassed the Zacks Consensus Estimate, but net sales missed the same. Both metrics increased on a year-over-year basis.
AWI’s results were backed by robust growth in operating income and adjusted EBITDA, as well as expanded margins, fueled by positive performances from both the Mineral Fiber and Architectural Specialties segments. The company remain focused on advancing digital and healthy spaces initiatives and pursuing attractive, bolt-on acquisitions.
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2023 (ended Jun 30, 2023) results, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate.
On a year-over-year basis, although DHI’s earnings declined, revenues increased. The company highlighted that the supply of both new and existing homes at affordable price points remains limited and that the demographics supporting housing demand remain favorable. This tailwind has helped this Arlington, TX-based homebuilder to witness net sales order growth of 37% year over year in the fiscal third quarter.
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Martin Marietta (MLM) Q2 Earnings & Revenues Beat, '23 View Up
Martin Marietta Materials, Inc.’s (MLM - Free Report) shares jumped 3.97% in the pre-market trading session on Jul 27 after it reported mixed results for second-quarter 2023. Earnings remarkably surpassed the Zacks Consensus Estimate and increased on a year-over-year basis. Revenues missed the consensus mark but rose from the prior-year period.
The company has been gaining from the inflow of public funds for infrastructure and manufacturing activities. Owing to this tailwind, Martin Marietta expects a significant boost in aggregate demand in the U.S. economy during the latter part of 2023. This surge in investment is expected to largely counterbalance the current downturn in residential construction, which is predicted to reach its lowest point in the third quarter of 2023.
Given solid second-quarter results and expectations for an even stronger next six months, the company also lifted its full-year adjusted EBITDA expectation.
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise
Martin Marietta Materials, Inc. price-consensus-eps-surprise-chart | Martin Marietta Materials, Inc. Quote
Inside the Headlines
Martin Marietta reported adjusted earnings from continuing operations of $5.60 per share, which handily surpassed the Zacks Consensus Estimate of $4.83 by 15.9%. Also, the metric increased by 41.4% from the year-ago quarter’s adjusted level of $3.96.
Quarterly revenues were $1.82 billion, up 10.9% from the year-ago period. The metric missed the consensus mark of $1.83 billion by 0.3%.
Segmental Discussion
Building Materials (including aggregates, cement, ready-mixed concrete, asphalt, paving product lines and Freight) reported revenues of $1.74 billion, which increased 11.6% year over year. Pricing gains led to the gross margin improvement of 520 basis points (bps).
Within the Building Materials’ product and services umbrella, Aggregates’ revenues rose 8.9% of $1.15 billion from the year-ago quarter. Cement revenues rose 21.7% year over year to $197.7 million. Ready Mixed Concrete’s revenues grew 19.7% year over year to $271.4 million. Revenues in Asphalt and Paving product lines increased 11.7% from the year-ago quarter to $240.9 million.
Aggregates shipments fell 5.7% year over year and pricing advanced 18.6%.
Cement shipments improved 0.2% year over year. Pricing increased 21.8% year over year. The Cement gross profit grew by a whopping 84% in the quarter from a year ago.
Within the Downstream business, ready mixed concrete shipments declined 1.7%, while Asphalt shipments grew 1.7% in the quarter.
Magnesia Specialties reported revenues of $80.5 million, down 1.5% year over year. Nonetheless, gross profit increased 13% to $27.7 million, given higher pricing and a moderation of energy expenses.
Operating Highlights
The gross profit increased 31.8% year over year to $560.4 million. The adjusted gross margin was 30.8%, which increased 490 bps a year ago. Adjusted EBITDA of $596.1 million increased 24.6% year over year.
Liquidity and Cash Flow
As of Jun 30, 2023, Martin Marietta had cash and cash equivalents and restricted cash of $421.5 million compared with $358 million at 2022-end. Also, it had $1.20 billion of unused borrowing capacity on its existing credit facilities at June-end. Long-term debt (excluding current maturities) was $4.343 billion, up slightly from $4.341 billion at 2022-end.
Net cash provided by operations was $518.5 million for the first six months, up from $286.2 million in the year-ago period.
2023 Guidance Raised
Martin Marietta now expects consolidated products and services revenues of $6,725-$6,860 million, up from $6,600-$6,815 million stated earlier. The company anticipates adjusted EBITDA between $2,000 million and $2,100 million compared with the prior projection of $1,800 million-$1,900 million.
Interest expenses are likely to be in the range of $165-170 million and the tax rate is projected to be 21-22%. Net earnings from continuing operations attributable to Martin Marietta are anticipated to be in the range of $1,040-$1,150 million. Capital expenditure is likely to be in the band of $575-625 million.
Within the Building Materials business, total aggregate shipment growth is expected to be between down 5% and down 1%. Total aggregate pricing per ton is anticipated to grow 17-19%. Gross profit is likely to be between $1,330 and $1,395 million.
Zacks Rank & Recent Construction Releases
Martin Marietta currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Otis Worldwide Corporation’s (OTIS - Free Report) second-quarter 2023 earnings and sales surpassed the Zacks Consensus Estimate. Its quarterly results reflected 11th consecutive quarters of organic sales growth and solid operating margin expansion contributing to mid-single digit adjusted earnings per share growth.
The company remains focused on strong portfolio growth and generating a solid New Equipment backlog. It also intends to expand operating margins, return cash to shareholders through a capital-allocation strategy and pursue additional progress toward ESG goals.
Armstrong World Industries, Inc. (AWI - Free Report) reported mixed results for second-quarter 2023, wherein earnings surpassed the Zacks Consensus Estimate, but net sales missed the same. Both metrics increased on a year-over-year basis.
AWI’s results were backed by robust growth in operating income and adjusted EBITDA, as well as expanded margins, fueled by positive performances from both the Mineral Fiber and Architectural Specialties segments. The company remain focused on advancing digital and healthy spaces initiatives and pursuing attractive, bolt-on acquisitions.
D.R. Horton, Inc. (DHI - Free Report) reported third-quarter fiscal 2023 (ended Jun 30, 2023) results, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate.
On a year-over-year basis, although DHI’s earnings declined, revenues increased. The company highlighted that the supply of both new and existing homes at affordable price points remains limited and that the demographics supporting housing demand remain favorable. This tailwind has helped this Arlington, TX-based homebuilder to witness net sales order growth of 37% year over year in the fiscal third quarter.