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Vulcan Materials (VMC) Q4 Earnings & Revenues Beat Estimates

·5 min read

Vulcan Materials Company VMC reported fourth-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate and increasing year over year. Strong residential construction, recovering private non-residential construction, solid infrastructure investment and favorable pricing dynamics have been driving growth.

Shares of the nation’s largest producer of construction aggregates edged up 0.5% in the pre-market trading session following fourth-quarter results.

Chairman and CEO Tom Hill said, "Our markets are poised to outperform other parts of the country as demand continues to improve, and our industry-leading unit profitability increases with each passing quarter. We will continue to drive substantial value through the combination of our legacy business and the acquisition of USCR.”

Inside the Headlines

Adjusted earnings of $1.25 per share beat the consensus mark of $1.18 by 5.9%. The company’s bottom line also advanced 16.8% from the year-ago level.

Total revenues of $1,606.3 million surpassed the consensus mark of $1,582 million by 1.5% and increased 36.7% year over year. This upside was led by the acquisition of U.S. Concrete operations and strong growth in the aggregates business.

Vulcan Materials Company Price, Consensus and EPS Surprise

Vulcan Materials Company Price, Consensus and EPS Surprise
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 increased 20.5% year over year to $1,152.3 million owing to higher demand across all end-market segments. Aggregate shipments (volumes) increased 13% year over year (up 7% on a same-store basis). Strong demand, favorable weather in some markets served and a positive pricing environment across the globe supported growth.

For the quarter, freight-adjusted average sales price inched up 3.7% (4.2% on a mix-adjusted basis) from the prior-year level. Freight-adjusted revenues also rose 16.8% from the prior-year quarter to $860.9 million.

Gross profit of $325.9 million was up 18% year over year, backed by strong volume and price as well as effective cost-control measures.

Asphalt, Concrete and Calcium

Revenues from the Asphalt segment were $197.4 million, up 1.4% year over year. The segment generated a gross profit of $3.6 million, reflecting a decline from $17 million a year ago. This was mainly due to higher costs for liquid asphalt (a $17-million impact). Asphalt volumes contracted 1% as volume growth in Alabama, New Mexico, Tennessee, and parts of Texas was offset by lower volumes in California and Arizona (its two largest asphalt markets).

Total revenues from the Concrete segment were $370 million, up 333.3% year over year. Further, gross profit totaled $21.9 million, up 157.6% year over year. The upside was attributable to higher shipments and price growth in its legacy operations as well as contribution from USCR operations. Shipments grew 307.9% year over year and average selling prices increased 6.9% from the prior-year level.

Total revenues from the Calcium segment were down 41.7% from the prior-year figure to $1.4 million. The segment reported a gross profit of $0.3 million, down from $1.2 million in the prior-year level.

Operating Highlights

Selling, Administrative and General or SAG expenses — as a percentage of total revenues — declined 60 basis points to 7.8% for the quarter. Adjusted EBITDA was up 23.2% year over year to $383.4 million.

2021 Highlights

Adjusted earnings came in at $5.04 per share, reflecting an increase of 7.7% from 2020. Total revenues increased 14% from a year ago to $5,552.2 million. Adjusted EBITDA advanced 9.7% year over year to $1,451.3 million.

Financials

As of Dec 31, 2021, cash and cash equivalents were $235 million, down from $1,197.1 million at 2020-end. Long-term debt was $3,874.8 million at December-end, up from $2,772.2 million at 2020-end.

2022 Guidance

For 2022, the company now anticipates adjusted EBITDA in the range of $1.720-$1.820 billion. Net earnings are expected within $800-$890 million and aggregates shipment growth is anticipated to be 5-7%.

Zacks Rank

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

Fluor Corporation FLR — a Zacks Rank #1 company — is gaining from its "Building a Better Future" initiative, which focuses on enhancing the markets outside the traditional oil and gas sector, fair and balanced commercial deals, financial discipline as well as high-performing business culture. It made significant progress toward strategic goals that comprise the reduction of outstanding debt by 30% and identified ways for more than $150 million in annual cost savings.

Fluor’s earnings for 2021 are expected to grow 143.1%. That said, FLR’s earnings have remained stable over the past 60 days.

Quanta Services, Inc. PWR, a Zacks Rank #2 (Buy) company, is set to deliver a resilient performance in 2021 and beyond despite a challenging environment. It is benefiting from a three-pronged growth strategy and strong margins from the Electric Power Infrastructure segment. Focus on the base business via supporting long-term programmatic spend of utilities and participating in the development of infrastructure that supports renewables and technology deployments such as 5G as well as electric vehicles will drive growth. It is to be noted that 80-90% of revenues are derived from utility, communications, and a few pipeline and industrial infrastructure services, which remain strong.

Quanta Services’ earnings for 2021 have remained stable over the past 60 days. PWR’s earnings for 2021 are expected to advance 25.4%.

AECOM ACM — a Zacks Rank #2 company — has been continuously focusing on delivering industry-leading margins and unlocking capital to invest in growth as well as innovation. Also, focus on higher-margin and lower-risk Professional Services businesses bodes well.

AECOM’s earnings for fiscal 2022 are expected to grow 20.6%. That said, ACM’s earnings have increased 1.5% over the past seven days.


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