Vulcan Materials Company’s (VMC - Free Report) shares gained 6.9% in the pre-market trading session following third-quarter 2018 results, wherein earnings and revenues topped the Zacks Consensus Estimate and also improved year over year, given above-average increase in demand in the markets served by the company.
The nation's largest producer of construction aggregates reported adjusted earnings of $1.40 per share in the third quarter, surpassing the consensus mark of $1.36. The bottom line also increased about 34.6% on a year-over-year basis.
Moreover, total revenues of $1.24 billion outpaced the consensus mark of $1.22 billion. The top line also increased 13% from the prior-year quarter.
Segments in Detail
Revenues increased 14.6% year over year to $983.7 million. Freight-adjusted revenues rose 21.9% to $221 million.
Aggregate shipments (volumes) were up 10% year over year, reflecting solid underlying demand, except in a few markets that were impacted by severe weather. Many of the company's markets (North Carolina and Virginia) were impacted due to Hurricane Florence and extremely wet weather in September (in most Texas markets).
Despite weather-related woes in key markets and a 28% increase in diesel cost per gallon, gross profit amounted to $304 million, up 18% year over year.
Revenues in the Asphalt Mix segment were $231.7 million, up 22% from the prior-year quarter. Asphalt segment gross profit was $24 million, down $7 million from a year ago due to lower material margins. Asphalt mix selling prices increased 8% or $4.07 per ton. However, a 29% increase in unit cost of liquid asphalt more than offset the price improvement.
Total revenues in the Concrete segment were $101.7 million, down 11.9% year over year. Gross profit was $14.6 million, up 3.2% year over year. Same-store shipments were down 7% year over year due to wet weather in the company's Virginia markets.
Total revenues in the Calcium segment were $1.9 million, down 2.7% from the prior-year quarter. The segment reported gross profit of $0.9 million versus $0.7 million in the prior-year quarter.
Adjusted EBITDA was up 13% year over year to $353 million.
Selling, Administrative and General expenses were $82 million, up $8 million year over year due to acquired operations and the timing of certain accruals.
As of Sep 30, 2018, cash and cash equivalents were $38 million, down from $141.6 million at the end of 2017.
2018 Guidance Trimmed
The company expects strong aggregates shipment growth through the rest of the year.
The company’s earnings for the full year from continuing operations are expected within $3.85-$3.95 (versus prior expectation of $4.00-$4.65 per share) and adjusted EBITDA is projected in the range of $1.125-$1.135 (versus $1.15-$1.25 billion expected earlier). The trimmed expectation mainly reflects the impact of aggregates shipments that were deferred due to weather. Meanwhile, full-year Asphalt segment gross profit is expected to be $25 million lower than the prior year.
Currently, Vulcan Materials, which shares space with Martin Marietta Materials, Inc. (MLM - Free Report) and Summit Materials, Inc. (SUM - Free Report) , carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
United Rentals’ (URI - Free Report) third-quarter 2018 earnings and revenues surpassed the Zacks Consensus Estimate and also improved year over year. The upside can be attributed to strong gains in volume, margins and rates.
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