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Martin Marietta (MLM) to Post Q4 Earnings: What's in Store?

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Martin Marietta Materials, Inc. (MLM - Free Report) is scheduled to report fourth-quarter 2019 results on Feb 11, before the opening bell.

In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 13.1% and 6.2%, respectively. On a year-over-year basis, earnings and revenues of this aggregates producer grew 38.9% and 16.4%, respectively. The upside was mainly attributable to double-digit improvement in aggregates and cement shipments, as well as solid volume growth in downstream products.

Martin Marietta reported better-than-expected earnings in two of the last four quarters, with the average positive surprise being 35.6%.

Trend in Estimate Revision

The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.12 per share, which suggests a 27.7% increase from $1.66 reported in the year-ago period. Notably, earnings estimates for the quarter have decreased 1.9% over the past 30 days. The consensus mark for revenues is pegged at $1.02 billion, which calls for a 6.6% increase from the prior-year reported figure.

Let’s discuss the factors that are likely to be reflected on the upcoming quarterly results.

Factors to Consider

Martin Marietta — similar to other aggregate producers like Summit Materials, Inc. SUM, Vulcan Materials Company VMC and Eagle Materials Inc. EXP — is expected to have generated strong fourth-quarter earnings, given solid underlying demand from infrastructural projects and favorable weather.

Increased infrastructure activity, primarily in the public sector (arising from improved funding at the state and local levels), is expected to have helped Martin Marietta to generate higher year-over-year revenues. Notably, the infrastructure market represented 38% of its third-quarter aggregate shipments.

Large energy sector projects along the Texas and Gulf Coast are expected to have boosted demand for heavy building materials, and helped Martin Marietta to generate higher sales. Again, healthy commercial construction activities like growth in distribution centers, warehouses, data centers and wind turbine projects in the non-residential market (which represented 34% of third-quarter aggregate shipments) are expected to have aided Martin Marietta’s fourth-quarter performance. The company’s geographic footprint is expected to reflect the impact of solid residential construction (which accounted for 22% of third-quarter aggregate shipments), given improved U.S. housing market fundamentals.

Disciplined cost structure and favorable pricing are expected to have provided a meaningful boost to its fourth-quarter margins.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Martin Marietta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Martin Marietta currently carries a Zacks Rank #3 and has an Earnings ESP of -10.29%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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