Shares of The Monarch Cement Company (MCEM Quick QuoteMCEM - Free Report) have declined 3.2% since the company reported its third-quarter 2025 results, underperforming the S&P 500’s 1.9% decrease over the same period. The stock has also lagged the broader market over the past month, falling 6.8% against the S&P 500’s 0.2% increase.

Monarch Cement shows a year-over-year contraction in both revenues and earnings as weaker demand in its Ready-Mixed Concrete operations continued to weigh on results. Third-quarter net sales declined to $73 million from $80 million, largely reflecting reduced ready-mix volumes.

Net income slipped to $25.1 million from $26.4 million, with EPS falling to $6.44 from $7.21, due to lower gross margins and softer operating income. For the first nine months of 2025, revenues declined to $179.6 million from $202.5 million, while net income fell to $46.6 million from $54.5 million, reflecting similar volume-driven pressures and lower investment-related gains.

The Monarch Cement Co. Price, Consensus and EPS Surprise

The Monarch Cement Co. price-consensus-eps-surprise-chart | The Monarch Cement Co. Quote

MCEM’s Segment Performance and Other Key Metrics

Monarch Cement’s two major business lines — Cement and Ready-Mixed Concrete — continued to diverge operationally, mirroring the pattern seen earlier in the year. In the third quarter, Cement Business sales increased by $2.8 million, supported by both modest volume growth (up 1.7%) and favorable pricing. Meanwhile, the Ready-Mixed Concrete Business posted a $9.8 million decline in sales, driven by a steep 36.6% drop in cubic yards sold, only partially offset by slight price increases. This segment’s reduced scale reflects the December 2024 contribution of three ready-mix companies to RMCMO Holdings, LLC, which makes year-over-year comparisons less direct.

Gross margin pressures also persisted. The company’s consolidated third-quarter gross profit rate slipped to 38.5% from 40.6%, hurt by higher cement production costs and lower ready-mix volumes. Cement margins narrowed significantly — falling to 49.4% from 57.4% — as cost inflation more than offset price gains. Ready-mix margins dipped to 14% from 15.8%, reflecting mix shifts and increased material costs. Operating income dropped to $22.4 million from $26.1 million, consistent with the top-line declines.

MCEM: Management Commentary and Liquidity Conditions

Management highlighted the company’s solid liquidity position despite year-over-year earnings declines. Working capital stood at $148.9 million at Sept. 30, 2025, up from $141.2 million at year-end 2024, supported by higher receivables and increased cash levels. Total current assets rose by $12.1 million, reflecting stronger cash balances and a buildup in receivables tied to seasonal sales patterns. The cash balance of $56.8 million was slightly below the year-ago period, reflecting reduced cash from operations and higher dividend payments.

Cash flow trends were mixed. Operating cash flow for the nine months declined to $39.5 million from $46.6 million, pressured by lower earnings and working capital changes. Investing cash outflows moderated notably because of increased proceeds from equity investment disposals, and capital expenditures — primarily at cement production facilities — reached $25.6 million through Sept. 30. Management plans $40.1 million in full-year capital spending, underscoring ongoing investment in core production assets.

Factors Influencing MCEM’s Quarterly Results

Weather-related impacts remained a key operational constraint. Management reiterated that construction activity, and thus demand for cement and ready-mix concrete, is highly sensitive to extreme temperatures and heavy precipitation. While the company typically sees peak sales in the second and third quarters, unusually high rainfall, especially during the 2025 construction season, appears to have constrained both volume and profitability.

Another major factor affecting comparability is the December 2024 transfer of certain ready-mix entities to the joint venture RMCMO Holdings, LLC. Because these operations were fully consolidated in 2024 and not in 2025, both revenues and cost trends in the Ready-Mixed Concrete segment show disproportionately large declines. Monarch now reports its 49% share of RMCMO’s earnings separately as equity income, which totaled $1.8 million for the first nine months of 2025.

Investment-related items also contributed meaningfully to net results. Third-quarter unrealized gains on equity investments rose to $9.9 million, up from $5.3 million a year earlier, helping to mitigate the weaker operating performance. However, realized gains for the nine months were lower than those in the year-ago span. Dividend income also declined, mainly due to reduced distributions from oil and gas refining investments.

Guidance by MCEM

Management reaffirmed its 2025 capital expenditure plan and provided expected pension and postretirement spending, indicating stable long-term commitments and no anticipated changes in pension funding requirements for the year.

Other Developments at MCEM

The previously disclosed joint venture transaction with RMCMO Holdings, LLC — completed in late 2024 — remains the most recent major strategic development, and no subsequent changes were reported. The company also noted no legal proceedings, defaults or significant updates to corporate governance documents during the period.