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.
Vulcan (VMC) Q1 Earnings Hit by Low Shipments, Solid Pricing Aids
Read MoreHide Full Article
Vulcan Materials Company’s (VMC - Free Report) stock gained 1.8% in the day trading session on May 2 despite reporting lower earnings and revenues for the first quarter of 2024. The uptrend is likely to have been backed by the company’s consistent belief in its already strong 2024 guidance.
This leading Aggregate supplier reported impressive quarterly results despite unfavorable weather conditions for most of the quarter. Its first-quarter adjusted earnings per share (EPS) and revenues beat the consensus mark by 5.3% and 1.3%, respectively. However, EPS decreased 15.8% and revenues declined 6.2% from the year-ago period due to lower Aggregate shipments.
On the contrary, gross margin and adjusted EBITDA margin were up 140 basis points (bps) and 40 bps, respectively, year over year, on the back of continued pricing momentum and solid execution. (Read more: Vulcan Q1 Earnings Beat, Adjusted EBITDA Margin Up)
Vulcan Materials Company Price, Consensus and EPS Surprise
Impressively, strength in the Aggregate business and disciplined capital management helped it provide 16.3% or 260 bps higher returns on capital.
Strength in the Aggregates Holds Key
Aggregate segment, which accounted for 83.5% of total revenues, declined 0.4% year over year to $1.29 billion, mainly due to 7.1% lower shipments (volumes). On the reverse side, freight-adjusted average sales price climbed 10.2% to $20.59 per ton year over year and rose $1.25 per ton sequentially. At the time of earnings call, the company noted that the unusually cold and wet weather across many geographies hit the top line. Yet, pricing momentum, cost deceleration and unit profitability expansion, along with its Vulcan Way of Selling and Vulcan Way of Operating disciplines, partially overcome the headwinds.
Per our estimate, shipments were estimated at 49.7 million tons and the freight-adjusted average sales price was projected at $20.73 per ton.
The company’s durability of the Aggregates business and the consistency of execution stood out really well in the first quarter, as its cash gross profit per ton improved to $8.86 from $8.03. Its successful January price increases and moderating Aggregates cash cost of sales are providing strength to the company’s $11-$12 target.
An improving residential backdrop, primarily single-family, is a positive sign for VMC’s future activity in certain categories of non-residential construction. Yet, continued moderation in warehouse stash will be the biggest headwind to private and non-residential demand this year.
Moreover, the company continues to capitalize on better opportunities in the manufacturing category. Vulcan’s unmatched Southeastern footprint and unique logistics capabilities position it well to service these large Aggregates intensive projects.
Strong 2024 Guidance
Despite witnessing lower profitability, Vulcan still anticipates adjusted EBITDA in the range of $2.15-$2.30 billion, up from $2.01 billion reported in 2023. Net earnings are also anticipated to be in the range of $1.07-$1.19 billion versus $933 million generated in the prior year.
Aggregates segment cash gross profit per ton is expected to increase from the 2023 level of $9.46. Although total shipments are likely to be flat to down 4%, freight-adjusted price is expected to grow 10-12%.
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed results for first-quarter 2024, with earnings surpassing the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased on a year-over-year basis.
Going forward, MLM anticipates record federal-level and state-level infrastructure investments, large-scale heavy industrial activity, data centers, and energy projects to offset softer residential and warehouse construction demand, as well as anticipated moderation in light non-residential activity. Impressively, MLM increased full-year adjusted EBITDA guidance to $2.37 billion at the midpoint.
EMCOR Group, Inc. (EME - Free Report) reported impressive results for the first quarter of 2024. Its earnings surpassed the Zacks Consensus Estimate and increased year over year, backed by its focus on operational excellence.
Revenues also grew from the previous year due to a continued strong mix and pipeline of projects in large and growing market sectors with long-term secular trends, including high-tech and traditional manufacturing and network & communications.
Weyerhaeuser Company (WY - Free Report) reported mixed results for first-quarter 2024. Its earnings beat the Zacks Consensus Estimate but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West, a decrease in domestic sales volumes as well as sales realizations accompanied by increased lumber manufacturing and raw materials costs. Also, export sales volumes were softer, especially in China.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Vulcan (VMC) Q1 Earnings Hit by Low Shipments, Solid Pricing Aids
Vulcan Materials Company’s (VMC - Free Report) stock gained 1.8% in the day trading session on May 2 despite reporting lower earnings and revenues for the first quarter of 2024. The uptrend is likely to have been backed by the company’s consistent belief in its already strong 2024 guidance.
This leading Aggregate supplier reported impressive quarterly results despite unfavorable weather conditions for most of the quarter. Its first-quarter adjusted earnings per share (EPS) and revenues beat the consensus mark by 5.3% and 1.3%, respectively. However, EPS decreased 15.8% and revenues declined 6.2% from the year-ago period due to lower Aggregate shipments.
On the contrary, gross margin and adjusted EBITDA margin were up 140 basis points (bps) and 40 bps, respectively, year over year, on the back of continued pricing momentum and solid execution. (Read more: Vulcan Q1 Earnings Beat, Adjusted EBITDA Margin Up)
Vulcan Materials Company Price, Consensus and EPS Surprise
Vulcan Materials Company price-consensus-eps-surprise-chart | Vulcan Materials Company Quote
Impressively, strength in the Aggregate business and disciplined capital management helped it provide 16.3% or 260 bps higher returns on capital.
Strength in the Aggregates Holds Key
Aggregate segment, which accounted for 83.5% of total revenues, declined 0.4% year over year to $1.29 billion, mainly due to 7.1% lower shipments (volumes). On the reverse side, freight-adjusted average sales price climbed 10.2% to $20.59 per ton year over year and rose $1.25 per ton sequentially. At the time of earnings call, the company noted that the unusually cold and wet weather across many geographies hit the top line. Yet, pricing momentum, cost deceleration and unit profitability expansion, along with its Vulcan Way of Selling and Vulcan Way of Operating disciplines, partially overcome the headwinds.
Per our estimate, shipments were estimated at 49.7 million tons and the freight-adjusted average sales price was projected at $20.73 per ton.
The company’s durability of the Aggregates business and the consistency of execution stood out really well in the first quarter, as its cash gross profit per ton improved to $8.86 from $8.03. Its successful January price increases and moderating Aggregates cash cost of sales are providing strength to the company’s $11-$12 target.
An improving residential backdrop, primarily single-family, is a positive sign for VMC’s future activity in certain categories of non-residential construction. Yet, continued moderation in warehouse stash will be the biggest headwind to private and non-residential demand this year.
Moreover, the company continues to capitalize on better opportunities in the manufacturing category. Vulcan’s unmatched Southeastern footprint and unique logistics capabilities position it well to service these large Aggregates intensive projects.
Strong 2024 Guidance
Despite witnessing lower profitability, Vulcan still anticipates adjusted EBITDA in the range of $2.15-$2.30 billion, up from $2.01 billion reported in 2023. Net earnings are also anticipated to be in the range of $1.07-$1.19 billion versus $933 million generated in the prior year.
Aggregates segment cash gross profit per ton is expected to increase from the 2023 level of $9.46. Although total shipments are likely to be flat to down 4%, freight-adjusted price is expected to grow 10-12%.
Zacks Rank & Recent Construction Releases
VMC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Martin Marietta Materials, Inc. (MLM - Free Report) reported mixed results for first-quarter 2024, with earnings surpassing the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased on a year-over-year basis.
Going forward, MLM anticipates record federal-level and state-level infrastructure investments, large-scale heavy industrial activity, data centers, and energy projects to offset softer residential and warehouse construction demand, as well as anticipated moderation in light non-residential activity. Impressively, MLM increased full-year adjusted EBITDA guidance to $2.37 billion at the midpoint.
EMCOR Group, Inc. (EME - Free Report) reported impressive results for the first quarter of 2024. Its earnings surpassed the Zacks Consensus Estimate and increased year over year, backed by its focus on operational excellence.
Revenues also grew from the previous year due to a continued strong mix and pipeline of projects in large and growing market sectors with long-term secular trends, including high-tech and traditional manufacturing and network & communications.
Weyerhaeuser Company (WY - Free Report) reported mixed results for first-quarter 2024. Its earnings beat the Zacks Consensus Estimate but net sales missed the same.
On a year-over-year basis, both metrics declined due to lower fee harvest volumes in the West, a decrease in domestic sales volumes as well as sales realizations accompanied by increased lumber manufacturing and raw materials costs. Also, export sales volumes were softer, especially in China.