Vulcan Materials Co. Earnings Cheat Sheet: Beats the Street on Profit Rise

S&P 500 (NYSE:SPY) component Vulcan Materials Company (NYSE:VMC) reported net income above Wall Street’s expectations for the third quarter. Vulcan Materials is a producer of mainly crushed stone, sand and gravel, asphalt mix, concrete and cement.

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Vulcan Materials Company Earnings Cheat Sheet for the Third Quarter

Results: Net income for Vulcan Materials Company rose to $20 million (15 cents per share) vs. $13.2 million (10 cents per share) in the same quarter a year earlier. This marks a rise of 50.7% from the year earlier quarter.

Revenue: Rose 2.4% to $760.8 million from the year earlier quarter.

Actual vs. Wall St. Expectations: VMC beat the mean analyst estimate of 7 cents per share. It fell short of the average revenue estimate of $779.7 million.

Quoting Management: Commenting for the Company, Don James, Chairman and Chief Executive Officer, stated, “Business conditions remained challenging in the third quarter. The fragile economic recovery and absence of meaningful job growth continued to hamper construction activity while diesel fuel and liquid asphalt costs remained at elevated levels. However, we are pleased that continued improvement in product pricing in the third quarter helped offset these higher energy-related costs.”

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.8 percentage points to 15.2% from the year earlier quarter. Over that time, margins have contracted on average 2.3 percentage points per quarter on a year-over-year basis.

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the second quarter, which saw a 4.6% decrease.

The company’s profit in the latest quarter follows losses in the three previous quarters. The company reported a net loss of $8.1 million in the second quarter, a loss of $54.7 million in the first quarter and a loss of $47 million in the fourth of the last fiscal year.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 7 cents versus a mean estimate of a loss of 6 cents per share.

Looking Forward: Analysts seem more positive about the company’s results for the next quarter than three months ago. The average estimate for the fourth quarter has moved from a loss of 28 cents a share to a loss of 24 cents over the last ninety days. For the fiscal year, the average estimate has moved from a loss of 87 cents a share to a loss of 79 cents over the last ninety days.

Competitors to Watch: Martin Marietta Materials, Inc. (NYSE:MLM), Lafarge S.A. (LFRGY), Texas Industries, Inc. (NYSE:TXI), Eagle Materials, Inc. (NYSE:EXP), CRH PLC (NYSE:CRH) and United Basalt Products Ltd. (NYSE:UBP).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)

 

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