Vulcan (VMC) Queued for Q4 Earnings: What Factors to Note
Vulcan Materials Company VMC is scheduled to release fourth-quarter 2023 results on Feb 16, before the opening bell.
In the last reported quarter, the company’s adjusted earnings and revenues topped the Zacks Consensus Estimate by 2.2% and 0.4%, respectively. On a year-over-year basis, earnings and revenues increased 28.7% and 4.7%, respectively.
Vulcan’s earnings topped the consensus mark in three of the last four quarters and missed on the other occasion, the average surprise being 13.6%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised upward to $1.36 from $1.34 over the past 30 days. The estimated figure indicates a rise of 25.9% from the year-ago quarter.
The consensus estimate for revenues is pegged at $1.82 billion, suggesting 5.4% year-over-year growth.
Vulcan Materials Company Price and EPS Surprise
Vulcan Materials Company price-eps-surprise | Vulcan Materials Company Quote
Factors to Note
Vulcan’s quarterly revenues are expected to have witnessed year-over-year growth in the fourth quarter, given the strong pricing gains in aggregates and strength in public construction. Additionally, the extension of the construction season due to a mild winter is expected to have contributed to this growth. Higher non-residential construction activities and incremental federal funding from the Infrastructure Investment and Jobs Act are expected to have acted as a tailwind for VMC. Also, resilient pricing across its product lines is expected to have supported the growth.
The Aggregates business, including crushed stone, sand and gravel and other aggregates (which accounted for 74.4% of total third-quarter revenues), has been a major contributor to the top-line growth.
Our model suggests net sales from the Aggregates segment will grow 9.3% to $1.38 billion from a year ago.
However, reduced residential demand, along with higher material expenses, the shortage of skilled laborers and rising wage costs, are expected to have impacted VMC’s fourth-quarter results. Also, significant fluctuations in the prices of various resources may have been risks.
Our model suggests net sales from the Asphalt Mix segment (15.9% of total revenues) to be $256.3 million, indicating 7.7% growth from a year ago. We also anticipate revenues from the Concrete segment (16.7% of total revenues) to decline 9.7% to $325.4 million from a year ago.
The Calcium segment’s net sales are expected to be $2.3 million, suggesting a decline from $2.4 million a year ago.
We also predict Aggregates volumes to decline 0.9% year over year, whereas volumes for Asphalt Mix and Concrete units are likely to grow 6.6% and 5.4% year over year, respectively.
Efforts to enhance operational excellence, acquisition synergies and cost-control measures are expected to have aided the bottom line.
What Our Quantitative Model Predicts
Our proven model predicts an earnings beat for Vulcan this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +3.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Vulcan currently carries a Zacks Rank #3.
Other Stocks With the Favorable Combination
Here are some other companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.
Owens Corning OC has an Earnings ESP of +1.95% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
OC’s earnings for the to-be-reported quarter are expected to increase 13.3%. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 17.5%.
Louisiana-Pacific Corporation LPX has an Earnings ESP of +8.24% and a Zacks Rank #3.
LPX’s earnings for the to-be-reported quarter are expected to decline 14.8%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.3%.
JELD-WEN Holding, Inc. JELD has an Earnings ESP of +10.90% and has a Zacks Rank #3.
JELD’s earnings topped the consensus mark in each of the last four quarters, with the average being 126.5%. Earnings for the to-be-reported quarter are expected to decline 46.8% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Vulcan Materials Company (VMC) : Free Stock Analysis Report
Louisiana-Pacific Corporation (LPX) : Free Stock Analysis Report
Owens Corning Inc (OC) : Free Stock Analysis Report
JELD-WEN Holding, Inc. (JELD) : Free Stock Analysis Report
