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Vulcan Materials (VMC) Q2 Earnings Miss, Shipments Decline

Vulcan Materials Company’s VMC second-quarter 2017 adjusted earnings of 90 cents per share missed the Zacks Consensus Estimate of $1.22 by 26.2%. However, the bottom line was flat on a year-over-year basis.

Total revenue of $1.03 billion also missed the Zacks Consensus Estimate of $1.08 billion by 4.6%. Sales however increased 8% from the prior-year quarter.

Segment Details

Aggregates

Revenues increased 3% year over year to $818 million. Freight-adjusted revenues also inched up 3% year over year to $631 million.

Aggregates shipments (volumes) decreased 2% due to severe wet weather conditions and flooding in May and June, leading to a slowdown in construction activity. Aggregates segment gross profit was $253 million, down $1 million year over year.

Non-Aggregates

Revenues at the Asphalt Mix segment were $175.8 million, up 23.7% owing to a 16% increase in volumes. Asphalt segment gross profit was $29 million, down by $2 million year over year.

Total revenue at the Concrete segment was $105.2 million, up 29.6% year over year. Concrete segment gross profit was $9 million in the quarter, down by $3 million from the prior-year quarter. Shipments increased 21% from the prior-year quarter driven by increased volumes in most of the company's concrete markets.

Total revenue at the Calcium segment was $1.9 million, reflecting a decrease of 20.8% from the prior-year quarter. The segment reported gross profit of $0.6 million, down by $0.5 million from the prior-year quarter.

Vulcan Materials Company Price, Consensus and EPS Surprise

 

Operating Highlights

Adjusted gross margin of 32.6% fell 330 basis points (bps) in the second quarter. Adjusted EBITDA increased 2.9% year over year to $287.7 million.

Selling, Administrative and General expenses were $83 million, flat year over year.

Financials

As of Mar 31, 2017, cash and cash equivalents were $1.12 billion, up from $259 million at the end of 2016. During the second quarter, the company returned $44 million to shareholders through dividends and share repurchases. Total debt at the end of the second quarter was $3.4 billion.

2017 Guidance Updated

Adjusted EBITDA is projected in the range of $1.05 billion to $1.13 billion, lower than $1.125–$1.225 billion expected earlier.

Aggregates shipments are now expected between 182 and 187 million tons.

Asphalt, Concrete and Calcium gross profit growth is still anticipated at around 15%.

Core capital spending is still estimated at approximately $300 million to support increased level of shipments and bring down production costs and boost operating efficiencies.

Zacks Rank & Peer Releases

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

Masco Corporation’s MAS adjusted earnings of 60 cents per share in second-quarter 2017 were in line with the Zacks Consensus Estimate. Adjusted earnings increased 30.4% year over year.

D.R. Horton, Inc. DHI exhibited an impressive performance in the third quarter of fiscal 2017, with earnings and revenues beating the Zacks Consensus Estimate by 1.3% and 5.2%, respectively.

PulteGroup Inc.’s PHM second-quarter 2017 adjusted earnings of 47 cents per share beat the Zacks Consensus Estimate of 45 cents by 4.4%. Also, quarterly earnings reflected a 27% jump from the year-ago quarter’s adjusted figure of 37 cents.

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