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Vulcan Materials' (VMC) Q2 Earnings Miss Estimates, Up Y/Y

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Vulcan Materials Company (VMC - Free Report) posted mixed second-quarter 2018 results, with earnings missing the Zacks Consensus Estimate while revenues beating the same. That said, revenues and earnings improved year over year, given strong aggregates demand and public construction activity.

Vulcan’s reported adjusted earnings of $1.23 per share in the second quarter missed the consensus mark of $1.37. Nonetheless, the bottom line increased about 36.7% on a year-over-year basis.

Total revenues of $1.2 billion outpaced the Zacks Consensus Estimate of $1.16 billion. The top line increased 16% from the prior-year quarter.

Segments in Detail

Aggregates

Revenues increased 7.6% year over year to $956.3 million. Freight-adjusted revenues rose 15.7% to $730.5 million.

Aggregate shipments (volumes) were up 14.6% year over year, reflecting solid underlying demand, including sustained strength in public construction activity.  Many of the company's markets have been experiencing the conversion of higher public funding for transportation into higher shipments of aggregates.

Gross profit amounted to $283.5 million, up 12.8% year over year.

Non-Aggregates

Revenues in the Asphalt Mix segment were $211.8 million, up 20.5% from the prior-year quarter. Asphalt segment gross profit was $25.8 million, down from $28.8 million a year ago due to lower material margins. However, shipments grew 3% from the prior-year quarter.

Total revenues in the Concrete segment were $106.7 million, up 1.4% year over year. Gross profit was $13.2 million, up 42.6% year over year. Shipments increased 10% from the prior-year quarter.

Total revenues in the Calcium segment were $2.3 million, up 15.8% from the prior-year quarter. The segment reported gross profit of $0.8 million, up 31.1% from the prior-year quarter.

Vulcan Materials Company Price, Consensus and EPS Surprise

 

Vulcan Materials Company Price, Consensus and EPS Surprise | Vulcan Materials Company Quote

Operating Highlights

Adjusted EBITDA was up 13% year over year to $325 million.

Selling, Administrative and General expenses were $89 million, up $6 million year over year due to acquired operations and the timing of certain accruals.

Financials

As of Jun 30, 2018, cash and cash equivalents were $55.1 million, down from $141.6 million at the end of 2017.

2018 Guidance

The company expects strong aggregates shipment growth through the rest of the year. Vulcan expects same-store shipment growth for the full year between 7% and 9%, although at a lower-priced geographic mix.  

The company reiterated its 2018 earnings expectation from continuing operations between $4.00 and $4.65 per diluted share and Adjusted EBITDA within $1.15-$1.25 billion.

Zacks Rank & Key Picks

Currently, Vulcan carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the same space include Armstrong World Industries, Inc. (AWI - Free Report) , Construction Partners, Inc. (ROAD - Free Report) and Foundation Building Materials, Inc. (FBM - Free Report) , each carrying a Zacks Rank #2 (Buy).

Armstrong World Industries has an impressive long-term earnings growth rate of 17.3%.

Construction Partners has a long-term earnings growth rate of 10%.

Foundation Building Materials reported better-than-expected earnings in two of the trailing three quarters.

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