We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Martin Marietta's (MLM) Q4 Earnings Beat, Revenues Lag Estimates
Read MoreHide Full Article
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
Following the results, shares of this producer and supplier of construction aggregates and other heavy building materials dropped 0.1% in the pre-market trading session on Feb 14, 2024.
Going forward, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover, as demand still exceeds supply, particularly in its key markets.
Inside the Headlines
Martin Marietta reported earnings from continuing operations of $4.63 per share, surpassing the Zacks Consensus Estimate of earnings of $3.96 per share by 16.9%. Also, the metric increased 53.8% from the year-ago quarter’s adjusted earnings level of $3.01 per share.
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $1.61 billion missed the consensus mark of $1.64 billion by 2.1%. However, the metric rose 8.9% from the year-ago period’s levels.
Segmental Discussion
Building Materials (including aggregates, cement, ready-mixed concrete, asphalt, paving product lines and Freight) reported fourth-quarter revenues of $1.53 billion, up 8.9% year over year. For this segment’s revenues, our model predicted a value of $1.57 billion. The segment’s gross margin improved by 650 basis points (bps) to 30.3% year over year, backed by favorable pricing.
Within the Building Materials’ product and services umbrella, Aggregates’ revenues rose 9.4% to $1.02 billion from the year-ago quarter’s levels. Cement revenues increased 6.1% year over year to $199.1 million. Ready Mixed Concrete’s revenues increased 12% year over year to $232.8 million. Revenues in Asphalt and Paving product lines increased 13.3% from the year-ago quarter’s levels to $228.4 million.
In the reporting quarter, Aggregates shipments fell 2.1% year over year due to the company's value-over-volume strategy and moderating demand from the affordability-driven residential slowdown, along with a softening in warehouse and data center construction. However, pricing advanced 15%. Aggregates gross profit in the quarter increased 36.8% to $328.6 million year over year.
Cement shipments were on par with the prior-year quarter’s levels, while pricing increased 16.6% year over year. The Cement gross profit rallied 46% from the prior-year quarter’s figure.
Within the Downstream business, ready mixed concrete shipments were on par with the prior-year quarter’s figure, while Asphalt shipments rose 14.3% in the quarter.
Magnesia Specialties reported revenues of $76 million, up 9.2% year over year, driven by strong pricing gains in both chemicals and lime product lines, as well as improved demand for lime products. This was offset by lower demand for chemical products. We predicted a comparatively lower value of $69.8 million year over year compared with the reported figure. The gross profit margin increased 150 bps to 30.3% on the back of higher pricing and moderation of energy expenses.
Operating Highlights
The gross profit increased 36.5% year over year to $438.5 million. The adjusted gross margin was 30.1%, which notably increased 610 bps year over year. Adjusted EBITDA of $502.6 million increased 28.3% year over year.
2023 Highlights
Earnings from continuing operations increased to $19.32 per share from $13.7 per share in 2022. Total revenues were $6,777.2 million, up from $6,160.7 million in 2022. Adjusted EBITDA was $2,127.7 million, up from $1,600.3 million in 2022.
Liquidity and Cash Flow
As of Dec 31, 2023, Martin Marietta had unrestricted cash and cash equivalents of $1.27 billion compared with $358 million at 2022-end. It had $1.20 billion of unused borrowing capacity on its existing credit facilities at 2023-end. Long-term debt (excluding current maturities) was $3,945.6 million, down from $4,340.9 million at the 2022-end.
Net cash provided by operations was $1.53 billion in 2023, up from $991.2 million in the year-ago period.
2024 Guidance
Martin Marietta expects consolidated products and services revenues of $6,745-$7,185 million. Adjusted EBITDA is projected to be between $2,140 million and $2,340 million.
Interest expenses are likely to be $55-65 million and the tax rate is projected to be 21-22%. Net earnings from continuing operations attributable to Martin Marietta are anticipated to be $1,205-$1,385 million. Capital expenditures are anticipated to be $650-700 million.
Within the Building Materials business, total aggregate shipment growth is now expected to be between down 2% and up 2%. Total aggregate pricing per ton is anticipated to rise 10-12%. Gross profit is expected to be between $1,610 million and $1,730 million.
AECOM (ACM - Free Report) reported decent results for first-quarter fiscal 2024, with earnings surpassing the Zacks Consensus Estimate. On a year-over-year basis, the top and the bottom line increased, backed by solid organic net service revenues (NSR) growth in its design business.
ACM still anticipates to generate 8-10% organic NSR growth in the fiscal 2024. It expects adjusted EPS in the range of $4.35-$4.55. This indicates a 20% improvement from fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in the fourth quarter of 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
OTIS’ quarterly results indicated 13 consecutive quarters of organic sales growth and the results were marked by mid-teens growth in adjusted EPS, the third consecutive quarter of high-single-digit organic sales growth in the Service segment and a resurgence in New Equipment orders growth. Full-year 2023 also registered a notable mid-single-digit increase in organic sales and an expansion in operating profit margin and a robust low-teens growth in adjusted EPS.
Meritage Homes Corporation (MTH - Free Report) reported better-than-expected results for fourth-quarter 2023. Both earnings and total closing revenues surpassed the Zacks Consensus Estimate.
MTH’s earnings and total revenues declined on a year-over-year basis. Also, total closing revenues fell due to reduced home prices and volume, along with increased financing incentives and higher lot costs.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Martin Marietta's (MLM) Q4 Earnings Beat, Revenues Lag Estimates
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
Following the results, shares of this producer and supplier of construction aggregates and other heavy building materials dropped 0.1% in the pre-market trading session on Feb 14, 2024.
Going forward, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover, as demand still exceeds supply, particularly in its key markets.
Inside the Headlines
Martin Marietta reported earnings from continuing operations of $4.63 per share, surpassing the Zacks Consensus Estimate of earnings of $3.96 per share by 16.9%. Also, the metric increased 53.8% from the year-ago quarter’s adjusted earnings level of $3.01 per share.
Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise
Martin Marietta Materials, Inc. price-consensus-eps-surprise-chart | Martin Marietta Materials, Inc. Quote
Quarterly revenues of $1.61 billion missed the consensus mark of $1.64 billion by 2.1%. However, the metric rose 8.9% from the year-ago period’s levels.
Segmental Discussion
Building Materials (including aggregates, cement, ready-mixed concrete, asphalt, paving product lines and Freight) reported fourth-quarter revenues of $1.53 billion, up 8.9% year over year. For this segment’s revenues, our model predicted a value of $1.57 billion. The segment’s gross margin improved by 650 basis points (bps) to 30.3% year over year, backed by favorable pricing.
Within the Building Materials’ product and services umbrella, Aggregates’ revenues rose 9.4% to $1.02 billion from the year-ago quarter’s levels. Cement revenues increased 6.1% year over year to $199.1 million. Ready Mixed Concrete’s revenues increased 12% year over year to $232.8 million. Revenues in Asphalt and Paving product lines increased 13.3% from the year-ago quarter’s levels to $228.4 million.
In the reporting quarter, Aggregates shipments fell 2.1% year over year due to the company's value-over-volume strategy and moderating demand from the affordability-driven residential slowdown, along with a softening in warehouse and data center construction. However, pricing advanced 15%. Aggregates gross profit in the quarter increased 36.8% to $328.6 million year over year.
Cement shipments were on par with the prior-year quarter’s levels, while pricing increased 16.6% year over year. The Cement gross profit rallied 46% from the prior-year quarter’s figure.
Within the Downstream business, ready mixed concrete shipments were on par with the prior-year quarter’s figure, while Asphalt shipments rose 14.3% in the quarter.
Magnesia Specialties reported revenues of $76 million, up 9.2% year over year, driven by strong pricing gains in both chemicals and lime product lines, as well as improved demand for lime products. This was offset by lower demand for chemical products. We predicted a comparatively lower value of $69.8 million year over year compared with the reported figure. The gross profit margin increased 150 bps to 30.3% on the back of higher pricing and moderation of energy expenses.
Operating Highlights
The gross profit increased 36.5% year over year to $438.5 million. The adjusted gross margin was 30.1%, which notably increased 610 bps year over year. Adjusted EBITDA of $502.6 million increased 28.3% year over year.
2023 Highlights
Earnings from continuing operations increased to $19.32 per share from $13.7 per share in 2022. Total revenues were $6,777.2 million, up from $6,160.7 million in 2022. Adjusted EBITDA was $2,127.7 million, up from $1,600.3 million in 2022.
Liquidity and Cash Flow
As of Dec 31, 2023, Martin Marietta had unrestricted cash and cash equivalents of $1.27 billion compared with $358 million at 2022-end. It had $1.20 billion of unused borrowing capacity on its existing credit facilities at 2023-end. Long-term debt (excluding current maturities) was $3,945.6 million, down from $4,340.9 million at the 2022-end.
Net cash provided by operations was $1.53 billion in 2023, up from $991.2 million in the year-ago period.
2024 Guidance
Martin Marietta expects consolidated products and services revenues of $6,745-$7,185 million. Adjusted EBITDA is projected to be between $2,140 million and $2,340 million.
Interest expenses are likely to be $55-65 million and the tax rate is projected to be 21-22%. Net earnings from continuing operations attributable to Martin Marietta are anticipated to be $1,205-$1,385 million. Capital expenditures are anticipated to be $650-700 million.
Within the Building Materials business, total aggregate shipment growth is now expected to be between down 2% and up 2%. Total aggregate pricing per ton is anticipated to rise 10-12%. Gross profit is expected to be between $1,610 million and $1,730 million.
Zacks Rank & Recent Construction Releases
Martin Marietta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AECOM (ACM - Free Report) reported decent results for first-quarter fiscal 2024, with earnings surpassing the Zacks Consensus Estimate. On a year-over-year basis, the top and the bottom line increased, backed by solid organic net service revenues (NSR) growth in its design business.
ACM still anticipates to generate 8-10% organic NSR growth in the fiscal 2024. It expects adjusted EPS in the range of $4.35-$4.55. This indicates a 20% improvement from fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in the fourth quarter of 2023. Its earnings and net sales surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.
OTIS’ quarterly results indicated 13 consecutive quarters of organic sales growth and the results were marked by mid-teens growth in adjusted EPS, the third consecutive quarter of high-single-digit organic sales growth in the Service segment and a resurgence in New Equipment orders growth. Full-year 2023 also registered a notable mid-single-digit increase in organic sales and an expansion in operating profit margin and a robust low-teens growth in adjusted EPS.
Meritage Homes Corporation (MTH - Free Report) reported better-than-expected results for fourth-quarter 2023. Both earnings and total closing revenues surpassed the Zacks Consensus Estimate.
MTH’s earnings and total revenues declined on a year-over-year basis. Also, total closing revenues fell due to reduced home prices and volume, along with increased financing incentives and higher lot costs.