Vulcan Materials Q1 Loss Narrows, Revs Beat Ests


Vulcan Materials Company’s (VMC) first-quarter 2014 adjusted loss of 28 cents per share was narrower than the Zacks Consensus Estimate of a loss of 34 cents per share. The adjusted loss excludes one-time items such as earnings related to the sale of the Florida-area cement and concrete assets in March and interest expense related to debt purchased in the same month.

First-quarter 2014 adjusted loss was also narrower than the prior-year quarter loss of 47 cents per share.

Total revenue of $574.2 million beat the Zacks Consensus Estimate of $536 million by 7.1%. Total revenue increased 6.7% from the prior-year quarter owing to pricing gains and volume growth in aggregate segments. Total revenue in the first quarter comprised $548.5 million of net sales (up 8.7% year over year) and $25.9 million of delivery revenues.

Gross profit grew 93% to $34.1 million in the quarter due to solid volume growth and operating leverage in the Aggregates segment.

Adjusted EBITDA (excluding gain on sale of real estate) was $39 million, up 50% from the prior-year quarter driven by a strong top line and solid cost control.

Segment Details


Revenues rose 10.9% year over year to $360.8 million (including inter-segment sales) in the quarter owing to both pricing and volume improvement. Despite chilly winters, aggregates shipments (volumes) rose 6.0% year over year in the quarter, while average sales price increased 2.0% due to improvement in demand in most markets. Most of the shipment increase was reported in California, Florida, Texas, Georgia and Illinois.

Gross profit improved 55.2% in the quarter to $38.5 million due to better leverage on higher volumes and pricing.


Revenues in the Concrete segment were $96.0 million in the first quarter of 2014, down 3.9% year over year, due to volume decline of 6.4%. Gross loss narrowed from $10.1 million in the first quarter of 2013 to $9.2 million in the first quarter of 2014 due to volume growth and pricing gains.

Revenues in the Asphalt Mix segment were $83 million in the reported quarter, down 23.2% year over year, due to 1.3% pricing decline. However, volumes increased 16.7% in the quarter. Gross profit improved 147% to $4.7 million in the quarter due to higher volumes.

Revenues in the Cement segment were $8.6 million (including inter-segment sales), down 28.3% year over year due to a 30.6% decline in volume, which offset the increase in pricing during the quarter.

In the quarter, the segment posted a gross profit of $0.13 million, lower than $1.01 million in the year-ago quarter due to decreased volumes.

Financial Update

The company reported cash and cash equivalents of $268.8 million as of Mar 31, 2014 compared with $198.2 million as of Dec 31, 2013.

2014 Outlook

Aggregates: Aggregates demand is expected to grow in 2014. Management expects aggregates volume and pricing to increase in the upcoming quarters.
The company expects segment margins to improve further in 2014 driven by volume and pricing growth as well as solid cost control and operating efficiencies from profit enhancement initiatives.

Non-Aggregates: Volume and price are expected to improve in concrete and asphalt segments, driven mostly by increased private construction activity.  

Vulcan Materials carries a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Investors interested in the building and construction industry can also consider stocks like Aegion Corp. (AEGN), Simpson Manufacturing Co., Inc. (SSD) and Toll Brothers Inc. (TOL). While Simpson Manufacturing sports a Zacks Rank #1 (Strong Buy), Aegion Corporation and Toll Brothers carry a Zacks Rank #2 (Buy).

Read the Full Research Report on VMC
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Read the Full Research Report on TOL
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