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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.

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Following the results, shares of this producer and supplier of construction aggregates and other heavy building materials plunged 1% in the pre-market trading session on Wednesday.

MLM witnessed significant July precipitation, along with Tropical Storm Debby in North Carolina, Hurricane Beryl in Texas and Hurricane Helene in most of its Southeast footprint, which impacted product shipments and geographic mix in the third quarter. Owing to these temporary yet impactful hurdles, the company lowered its full-year guidance for major metrics.

In October, MLM acquired pure aggregates assets in South Florida and Southern California, consistent with its Strategic Operating and Analysis plan.

Inside the Headlines

Martin Marietta reported adjusted earnings per share (EPS) from continuing operations of $5.91, which missed the Zacks Consensus Estimate of $6.41 by 7.8% and decreased 15% from the year-ago quarter’s $6.94.

Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise

Martin Marietta Materials, Inc. price-consensus-eps-surprise-chart | Martin Marietta Materials, Inc. Quote

Total revenues of $1.89 billion missed the consensus mark of $1.92 billion by 1.7% and declined 5.3% from the year-ago figure of $1.99 billion.

The gross margin was down 200 basis points (bps) from the year-ago figure of 32%. Adjusted EBITDA of $646 million fell 8.4% year over year. Our model predicted a gross margin of 35% and adjusted EBITDA of $722.2 million.

MLM’s Segmental Discussion

Building Materials reported revenues of $1.81 billion, which declined 5.8% year over year. For this segment’s revenues, our model predicted a value of $1.9 billion. The segment’s gross margin declined 100 bps to 33% year over year.

Within the Building Materials umbrella, Aggregates’ revenues declined 2.8% to $1.25 billion from the year-ago quarter. Aggregates shipments fell 3.9% year over year to 53.7 million tons, but the average selling price increased 7.7% to $21.52 (up 8.9% on an organic mix-adjusted basis). Shipments fell due to inclement weather, mainly in the East Division and softer warehouse and residential demand across its footprint, partially offset by acquisitions.

Aggregates gross profit per ton increased 3% to a third-quarter record of $8.16, despite weather-driven inefficiencies.

Cement and ready mixed concrete revenues fell 29.9% year over year to $296 million. Cement shipments declined 43.7% year over year. Ready mixed concrete shipments declined 24.7% from the year-ago period. This was due to the divestiture of the South Texas cement plant and related concrete operations.

Asphalt and Paving revenues decreased 4.7% to $343 million from the year-ago period due to wet weather, project delays and a softer non-residential market. Asphalt shipments fell 6.7% year over year.

Magnesia Specialties reported record third-quarter revenues of $82 million, up 7.9% year over year, backed by pricing growth and improved lime shipments, which more than offset lower chemical shipments. We predicted a comparatively lower value of $76.7 million year over year. The gross margin also rose to 35% from 28% a year ago.

Liquidity and Cash Flow

As of Sept. 30, 2024, Martin Marietta had cash and cash equivalents of $52 million compared with $1.27 billion at 2023-end. It had $1.1 billion of unused borrowing capacity on its existing credit facilities at September 2024-end. Long-term debt (excluding current maturities) was $3.95 billion, in-line with the end of 2023.

Net cash provided by operations was $773 million in the first nine months of 2024, down from $973 million in the year-ago period. In this period, MLM returned $591 million to shareholders through dividend payments and share repurchases. As of Sept. 30, 2024, 11.9 million shares remained under the current repurchase authorization.

2024 Guidance Revised

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 a decline of 3% at the midpoint from $2.128 billion in 2023. The reduced projection reflects weather-related impacts on third-quarter results.

Net earnings from continuing operations attributable to Martin Marietta are now anticipated to be $1.96-$2.02 billion (compared with $2.03-$2.165 billion expected earlier), up from $1.20 billion in 2023.

Aggregate shipment is now expected to be down 2.5-4% compared with prior expectations of 1-4%. Total aggregate pricing per ton is now anticipated to rise 9-11% compared with 11-13% expected earlier.

Aggregate gross profit is expected to be in the $1.41-$1.47 billion range. This reflects a decline from a previous projection of $1.51-$1.62 billion.

Cement and Downstream gross profit are expected to be in the $360-$385 million range, down from previous estimation of $365-$420 million. Magnesia Specialties’ gross profit is now expected to be in the $105-$110 billion range compared with $100-$110 billion expected earlier.

Capital expenditures are now anticipated to be in the range of $850-900 million compared with prior projection of $675-725 million.

Zacks Rank & Recent Construction Releases

Martin Marietta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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DHI reported adjusted EPS of $3.92 in the fiscal fourth quarter, which fell short of the Zacks Consensus Estimate of $4.20 by 6.7% and declined 11.9% from the year-ago figure of $4.45.

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 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 EPS and adjusted free cash flow.

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