Vulcan (VMC) Q4 Earnings & Revenues Beat, Adjusted EBITDA Up
Vulcan Materials Company VMC reported strong results for fourth-quarter 2023, wherein earnings and revenues surpassed their respective Zacks Consensus Estimate. On a year-over-year basis, both metrics increased year over year.
This performance can be attributed to the consistent strategic execution and the strong performance of its aggregates-led business. Additionally, large industrial projects contributed to its better-than-expected results.
Shares of the company gained 5.6% in the pre-market trading session on Feb 16, after the earnings release.
Inside the Headlines
Adjusted earnings of $1.46 per share beat the consensus mark of $1.36 by 7.4% and increased 35.2% from the year-ago level of $1.08.
Vulcan Materials Company Price, Consensus and EPS Surprise
Vulcan Materials Company price-consensus-eps-surprise-chart | Vulcan Materials Company Quote
Total revenues of $1.83 billion topped the consensus mark of $1.82 billion by 0.5% and increased 5.9% year over year.
Segments in Detail
Aggregates
Revenues from the segment increased 12% year over year to $1.41 billion. Aggregate shipments (volumes) increased 2% year over year to 55.3 million tons. Abnormally wet and cold weather across the majority of the company’s footprint in the previous year, as well as continued benefit from industrial-related non-residential project activity in certain markets in the Southeast, helped VMC generate a strong top line.
Freight-adjusted average sales price rose 13.9% to $19.32 per ton from the prior-year level of $16.96. Freight-adjusted revenues rose 16.3% from the prior-year quarter to $1.07 billion.
Gross profit of $423.9 million increased 29.6% from the prior year and gross margin expanded 400 bps. Cash gross profit improved to $9.92 per ton from $8.19, backed by continued pricing momentum, solid execution, and moderating inflationary pressures.
Asphalt, Concrete and Calcium
Revenues from the Asphalt segment were $286.4 million, up 20.3% year over year. The segment generated a solid gross profit of $36.3 million compared with $17.1 million a year ago, and the gross profit margin expanded 550 bps to 13%. Volumes grew 17.9%, and prices improved 2.5% year over year.
Total revenues from the Concrete segment were $256 million, down 29% year over year. Gross profit totaled $11.4 million, up from $4.6 million a year-ago period. Shipments fell 34.8% year over year, but average selling prices increased 10.3% from the prior-year level.
Total revenues from the Calcium segment decreased to $2 million from the prior-year figure of $2.4 million. The segment reported a gross profit of $0.6 million, down from $1.1 million a year ago.
Operating Highlights
Selling, administrative and general (SAG) expenses — as a percentage of total revenues — improved 50 basis points to 7.8% from a year ago. Adjusted EBITDA was up 26.9% year over year to $476 million.
2023 Highlights
Adjusted earnings came in at $7.00 per share, reflecting an increase from $5.11 at 2022-end. Total revenues increased to $7.78 billion from $7.32 billion reported in 2022.
Adjusted EBITDA advanced 23.7% year over year to $2.01 billion.
Financials
As of Dec 31, 2023, cash and cash equivalents were $931.1 million, significantly up from $161.4 million at 2022-end. Long-term debt was $3.88 billion at 2023-end, in line with the 2022 level.
At 2023-end, total debt to trailing-12-months adjusted EBITDA was 1.9x, down from 2.4x at the end of 2022.
For 2023, capital expenditures for maintenance and growth projects were $625 million. Return on average invested capital was 16.3%, up 280 bps on a trailing 12-month basis.
2024 Guidance
For the year, the company anticipates adjusted EBITDA in the range of $2.15-$2.30 billion and net earnings of $1.07-$1.19 billion. SAG expenses are expected to be $550-$560 million, with interest expenses of approximately $155 million, depreciation, depletion, accretion, and amortization expenses of nearly $610 million, and an effective tax rate of 22-23%.
In the Aggregates segment, cash gross profit per ton is likely to improve from the 2023 level of $9.46. Total shipments are likely to be flat to down 4%, freight-adjusted price growth is likely to be in the range of 10-12% and freight-adjusted cash cost is estimated to increase mid-single digit.
In Asphalt, Concrete and Calcium segment, cash gross profit is expected to be $275 million. Asphalt is anticipated to contribute nearly 70% of non-aggregates cash gross profit, while Concrete is likely to add approximately 30% of the same.
The company expects to have capital expenditures between $625 and $675 million for maintenance and growth projects.
Zacks Rank & Recent Construction Releases
VMC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AECOM ACM reported decent results for first-quarter fiscal 2024, with earnings surpassing the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines increased, backed by solid organic net service revenues (NSR) growth in its design business.
ACM anticipates generating 8-10% organic NSR growth in fiscal 2024. It expects adjusted earnings in the range of $4.35-$4.55 per share. This indicates a 20% improvement from the fiscal 2023 levels on a constant-currency basis, considering the mid-point of the guidance.
Martin Marietta Materials, Inc. MLM reported mixed fourth-quarter 2023 results, with earnings surpassing the Zacks Consensus Estimate and increasing on a year-over-year basis. Revenues missed the consensus mark but rose year over year.
Going forward, MLM anticipates strong demand for infrastructure, large-scale energy and domestic manufacturing projects. This will largely offset weaker residential demand and the anticipated softening in light non-residential activity. With mortgage rates stabilizing and affordability headwinds receding, MLM fully expects single-family residential construction to recover, as demand still exceeds supply, particularly in its key markets.
Watsco, Inc. WSO reported dismal fourth-quarter 2023 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top line grew while the bottom line dwindled.
The quarter’s results reflect a seasonal sales trend, wherein HVAC equipment witnessed flat sales while sales in other HVAC products declined year over year. Also, sales volume for commercial refrigeration products was down. Furthermore, high costs and expenses impacted the bottom line of the company.
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