Vulcan Materials Up Over 6%, On Pace for Record High Close — Data Talk

Vulcan Materials Company VMC reported third-quarter 2024 results, with earnings and revenues missing their respective Zacks Consensus Estimate and declining on a year-over-year basis due to severe weather, including hurricanes and storms across the Southeast, that led to lower aggregates shipments.

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VMC’s shares grew 1.9% in the pre-market trading session on Oct. 30, after the earnings release. Investors might have been optimistic about the strong pricing environment, improved operational efficiency and strategic acquisitions.

Nonetheless, Vulcan reported a 10% increase in aggregates cash gross profit per ton, marking the eighth consecutive quarter of double-digit growth. Additionally, Vulcan’s recent acquisition of Wake Stone Corporation will extend its presence in the high-growth Carolinas region. The company's "Vulcan Way of Selling and Operating" principles as key drivers in enhancing profitability and seamlessly integrating new operations.

Inside the Headlines

Adjusted earnings of $2.22 per share missed the consensus mark of $2.34 by 5.1% and declined 3.1% from the year-ago level.

Total revenues of $2.004 billion missed the consensus mark of $2.036 billion by 1.6% and declined 8.3% year over year.

Vulcan Materials Company Price, Consensus and EPS Surprise

Vulcan Materials Company price-consensus-eps-surprise-chart | Vulcan Materials Company Quote

Segments in Detail

Aggregates

Revenues from the segment were down 3.4% year over year to $1.57 billion. Aggregate shipments (volumes) declined 10% year over year to 57.7 million tons. We expected Aggregate revenues of $1.66 billion on 60.6 million tons of shipments. Shipments across the Southeast were disrupted due to heavy rainfall in July, followed by multiple hurricanes and severe storms in August and September. This contrasts with the previous year's third quarter, which saw fewer severe weather events.

Freight-adjusted average sales price rose 10.2% to $21.27 per ton from the prior-year level. Our estimate for the same was pegged at $21.22 per ton. Freight-adjusted revenues were down 0.6% from the prior-year quarter’s levels to $1.23 billion.

Gross profit of $498.5 million inched down from the prior-year figure of $509.1 million but gross margin expanded 40 basis points (bps). Cash gross profit per ton improved 10% to $10.89 despite the challenges.

Asphalt and Concrete

Revenues in the Asphalt segment were $381.1 million (ahead of our expectation of $355.9 million), up 9.8% year over year. The segment generated a solid gross profit of $60.2 million, up 7.7% from a year ago. Volumes were up slightly to 4.1 million tons from 4 million tons a year ago, while prices improved 6.1%.

Total revenues from the Concrete segment were $174.4 million (lower than our expectation of $189.1 million), down 52.2% year over year. Gross profit totaled $6.5 million compared with $26 million in the year-ago period. Shipments fell to 0.9 million cubic yards from 2.1 million cubic yards year over year. The downside was mainly due to the previous third quarter's inclusion of results from divested concrete assets in Texas. Average selling prices increased 9.2% from the prior-year level.

Operating Highlights

Selling, administrative and general (SAG) expenses — as a percentage of total revenues — improved 20 basis points to 6.4% from a year ago.

Adjusted EBITDA margin was up 140 bps to 29% year over year.

Financials

As of Sept. 30, 2024, cash and cash equivalents were $433.2 million, down from $931.1 million at 2023-end. Long-term debt was $3.33 billion at September-end, down from the 2023 level of $3.88 billion.

As of September-end, total debt to trailing-12-months adjusted EBITDA was 1.7x, down from 1.9x at the end of 2023.

In the first nine months of 2024, net cash provided by operating activities was $969.5 million compared with $1.06 billion a year ago.

2024 Guidance Updated

Weather disruptions have been impacting construction, affecting shipments and prompting a revised full-year adjusted EBITDA forecast of approximately $2 billion. Despite these challenges, demand fundamentals remain strong, with positive pricing dynamics and solid execution.

Looking to 2025, the company anticipates high-single-digit price increases in aggregates, cost benefits from operational efficiencies, and double-digit growth in cash gross profit per ton. Volume growth is expected due to robust public construction and a recovering private sector. The company aims to leverage its commercial and operational strengths to capitalize on this demand and drive earnings growth.

The company expects capital expenditures between $625 million and $650 million for maintenance and growth projects.

Zacks Rank & Recent Construction Releases

VMC currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Martin Marietta Materials, Inc. MLM reported tepid results for third-quarter 2024, with earnings and revenues missing the Zacks Consensus Estimate. Both the top and bottom lines decreased on a year-over-year basis.

Martin Marietta now expects total revenues of $6.450-$6.705 billion, down from $6.78 billion in 2023. Earlier, it expected total revenues of $6.5-$6.94 billion. Adjusted EBITDA is now projected to be between $2.015 billion and $2.115 billion, down from the previous projection of $2.1-$2.3 billion. This reflects decline of 3% at midpoint from $2.128 billion in 2023. The reduced projection reflects weather related impacts on third quarter results.

Masco Corporation MAS reported third-quarter 2024 results, wherein earnings met the Zacks Consensus Estimate and net sales marginally beat the same. Strong operational efficiency helped it deliver strong earnings amid challenging market conditions.

Masco lowered the upper limit of its 2024 adjusted earnings per share (EPS) guidance due to challenged market demand.

Armstrong World Industries, Inc. AWI reported solid results for third-quarter 2024, wherein earnings and net sales topped the Zacks Consensus Estimate and increased on a year-over-year basis.

Given the solid third-quarter results and improved line of sight for the full year, Armstrong World raised its 2024 guidance for adjusted EBITDA, adjusted earnings per share (EPS) and adjusted free cash flow.

Zacks Investment Research

Vulcan Materials (VMC) reported $2 billion in revenue for the quarter ended September 2024, representing a year-over-year decline of 8.3%. EPS of $2.22 for the same period compares to $2.29 a year ago.

The reported revenue compares to the Zacks Consensus Estimate of $2.03 billion, representing a surprise of -1.34%. The company delivered an EPS surprise of -5.13%, with the consensus EPS estimate being $2.34.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Vulcan performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

• Average unit sales price per ton - Aggregates (freight adjusted): $21.27 versus $21.20 estimated by four analysts on average.
• Unit shipments - Aggregates: 57,700 KTon versus 59,740.56 KTon estimated by four analysts on average.
• Unit shipments - Asphalt mix: 4,100 KTon versus the three-analyst average estimate of 4,039.63 KTon.
• Unit shipments - Ready-mixed concrete: 900 KCuYd compared to the 1,011.27 KCuYd average estimate based on three analysts.
• Average unit sales price per ton - Asphalt mix: $80.88 compared to the $79.82 average estimate based on three analysts.
• Average unit sales price per cubic yard - Ready-mixed concrete: $185.61 compared to the $181.93 average estimate based on three analysts.
• Net sales- Aggregates: $1.57 billion compared to the $1.63 billion average estimate based on six analysts. The reported number represents a change of -3.3% year over year.
• Net sales- Asphalt: $381.10 million compared to the $369.63 million average estimate based on six analysts. The reported number represents a change of +9.8% year over year.
• Net sales- Concrete: $174.40 million compared to the $186.61 million average estimate based on six analysts. The reported number represents a change of -52.2% year over year.
• Net sales- Aggregates intersegment sales: -$124 million versus the five-analyst average estimate of -$131.92 million. The reported number represents a year-over-year change of -19.7%.
• Gross profit- Aggregates: $498.50 million compared to the $528.70 million average estimate based on six analysts.
• Gross Profit- Asphalt: $60.20 million compared to the $63.98 million average estimate based on six analysts.

View all Key Company Metrics for Vulcan here>>>

Shares of Vulcan have returned +4.9% over the past month versus the Zacks S&P 500 composite's +1.8% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.

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