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Why Is Vulcan Materials (VMC) Up 4.5% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for Vulcan Materials Company (VMC - Free Report) . Shares have added about 4.5% in that time frame.

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

First-Quarter 2018 Results

Vulcan Materials’ earnings and revenues both surpassed the Zacks Consensus Estimate in the first quarter of 2018. Revenues and earnings improved year over year, despite adverse weather conditions and higher-than-anticipated energy costs.

Vulcan’s reported adjusted earnings of 44 cents per share in first-quarter 2018 surpassed the Zacks Consensus Estimate of 22 cents by 100%. Also, the bottom line increased about 29.4% on a year-over-year basis.

Total revenues of $854 million outpaced the Zacks Consensus Estimate of $798.6 million by 7%. The top line increased 9% from the prior-year quarter.

Segments in Detail

Aggregates

Revenues increased 7.6% year over year to $699.7 million. Freight-adjusted revenues rose from $33 million a year ago to $529 million.

Aggregate shipments (volumes) were up 6% year over year. In the quarter under review, shipments in Arizona, California, Florida and coastal Texas experienced double-digit gains on the back of solid demand growth and the start of some large projects.  However, shipment rates lagged in North Texas due to wet weather.

Non-Aggregates

Revenues in the Asphalt Mix segment were $103.8 million, up 8.4%. Asphalt segment’s gross profit was $246 million, down $8 million year over year. Shipments were in line with the prior-year quarter’s figure, as cold and wet weather in the key markets limited paving activity.

Total revenues in the Concrete segment were $100.9 million, up 13.6% from the year-ago quarter. Gross profit was $10.3 million, in line with the prior-year quarter. Shipments increased 3% from the prior-year quarter.

Total revenues in the Calcium segment were $1.9 million, up 3% from the year-ago quarter. The segment reported gross profit of $547 million, down 24.3% from the prior-year quarter’s tally.

Operating Highlights

Adjusted gross margin of 22% fell 160 basis points in the first quarter. Also, adjusted EBITDA was up 12% year over year to $168 million.

Selling, Administrative and General expenses were $78 million, down $4 million from the prior-year quarter.

Financials

As of Mar 31, 2018, cash and cash equivalents were $38.1 million, down from $141.6 million at the end of 2017.

2018 Guidance

The company expects earnings from continuing operations between $4.00 and $4.65 per share. Adjusted EBITDA is envisioned in the range of $1.15-$1.25 billion. Aggregate shipments from Aggregates USA operations are expected at roughly 7 million tons.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.

VGM Scores

At this time, VMC has an average Growth Score of C. Its Momentum is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for momentum investors than growth investors.

Outlook

VMC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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