It has been about a month since the last earnings report for Martin Marietta (MLM Quick QuoteMLM - Free Report) . Shares have lost about 4.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Martin Marietta due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Martin Marietta Q1 Earnings Beat Estimates, 2024 View Up

Martin Marietta reported mixed results for the first quarter of 2024. Earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Both the top and bottom lines decreased on a year-over-year basis.

Going forward, the company 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, it increased full-year adjusted EBITDA guidance to $2.37 billion at the midpoint.

Inside the Headlines

Martin Marietta reported adjusted earnings per share (EPS) from continuing operations of $1.93, which surpassed the Zacks Consensus Estimate of $1.88 by 2.7% but decreased 10.7% from the year-ago quarter’s $2.16.

Total revenues were $1.25 billion in the reported quarter, down 7.6% from the year-ago figure of $1.35 billion. The metric missed the consensus mark of $1.3 billion by 3.4%.

Segmental Discussion

Building Materials reported revenues of $1.17 billion, which declined 7.9% year over year. The segment’s gross margin declined 100 basis points (bps) to 21% year over year.

Within the Building Materials umbrella, Aggregates’ revenues declined 3% to $885 million from the year-ago quarter. Aggregates shipments fell 12.3% year over year, but average selling price (ASP) advanced 12.2% (up 12.7% on an organic mix-adjusted basis). Shipments fell due to inclement weather, which impacted the East and Southwest divisions, coupled with softened demand in warehouse, office and retail construction. This was partially offset by more favorable weather and relative strength in its Central and West divisions. ASP increased due to the strong realization of pricing actions taken in January.

Cement and ready mixed concrete revenues fell 22.1% year over year to $265 million. Cement shipments declined 37.1% year over year. Ready mixed concrete shipments declined 21.2%. This was due to the divestiture of the South Texas cement plant and related concrete operations, as well as extremely wet weather in Texas.

Asphalt and Paving revenues increased to $59 million from the year-ago reported figure of $58 million. Asphalt shipments grew 0.2%. The segment witnessed seasonal winter operational shutdowns in Minnesota and unfavorable winter conditions in Colorado.

Magnesia Specialties reported revenues of $81 million, down 3% from $83 million year over year, due to lower chemical shipments offsetting higher pricing.

The gross profit margin increased 600 bps to 36% on the back of higher pricing.

Operating Highlights

The adjusted gross margin was in line with the year-ago figure of 22%. Adjusted EBITDA of $291 million fell 10.2% year over year. The adjusted EBITDA margin was 23%, down 70 bps from a year ago.

Liquidity & Cash Flow

As of Mar 31, 2024, Martin Marietta had cash and cash equivalents of $2.65 billion compared with $1.27 billion at 2023-end. It had $1.2 billion of unused borrowing capacity on its existing credit facilities at March 2024-end. Long-term debt (excluding current maturities) was $3.95 billion, which aligned with the end of 2023.

Net cash provided by operations was $1.72 billion in the first quarter, up from $161 million in the year-ago period.

2024 Guidance Updated

Martin Marietta now expects total revenues of $6.9-$7.3 billion, up 5% at midpoint from $6.78 billion in 2023. Earlier the company expected total revenues of $6.75-$7.19 billion.

Adjusted EBITDA is now projected to be between $2.3 billion and $2.44 billion, up from the previous projection of $2.14-$2.34 billion. This reflects growth of 11% at midpoint from $2.13 billion in 2023.

Net earnings from continuing operations attributable to Martin Marietta are now anticipated to be $2.21-$2.3 billion (versus $1.21-$1.39 billion expected earlier), up 88% at midpoint year over year.

Aggregate shipment growth is expected to be up 2-6%, or $207 million at midpoint, up from prior expectation of down 2% to up 2%. Total aggregate pricing per ton is now anticipated to rise 11-13% or $22.24 at midpoint compared with 10-12% projected earlier.

Aggregate gross profit is expected to be within the $1.71-$1.79 billion range, up 27% at the midpoint from the 2023 level. This reflects growth from previous projection of $1.61-$1.73 billion. Gross profit per shipped ton is estimated to be at $8.45, reflecting 22% growth from the previous year.

Capital expenditures are anticipated to be in the range of $675-725 million versus $650-700 million expected earlier.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

Currently, Martin Marietta has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Martin Marietta has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.