Vulcan Materials Company
) posted net loss of 42 cents per share in the first quarter of
2013, wider than the year-ago quarter loss of 40 cents per share.
The Zacks Consensus Estimate for the quarter is a loss of 36
cents per share.
The loss for the first quarter of both 2011 and 2012 includes the
impact of gains on sale of real estate and businesses and
Total revenue of $538.2 million surpassed the Zacks Consensus
Estimate of $514 million by 4.7%. Total revenue also increased
0.4% from the prior-year quarter, driven by price increase in the
aggregates segment and volume growth in ready mix concrete and
Top-line growth mostly benefitted from the increase in private
construction activity, especially residential. Total revenue
comprised $504.6 of net sales and $33.6 million of delivery
Adjusted EBITDA was $26.0 million, down 44.7% from the prior-year
quarter. Selling, administrative and general (SAG) costs declined
0.3% from the prior-year quarter to $64.7 million attributable to
Vulcan's cost saving efforts.
Revenues rose 0.3% to $325.4 million (including inter-segment
sales) in the quarter as gains from price increases were
partially offset by volume declines and strong year-ago
comparisons, which included favorable weather conditions in 2012.
Aggregates shipments (volumes) declined 5.0% year over year in
the quarter. Average sales price increased 5% due to improvement
in most markets.
The company is witnessing a growing demand for private
construction, including residential housing starts and contract
awards for non-residential buildings, following a steady recovery
in the overall housing industry. Due to growth in housing
construction activity, Vulcan saw some shipment growth in the
states of Arizona, California and Florida, with each state
growing a double digit percentage increase in the quarter.
Revenues of the Concrete and Cement segment witnessed a
year-over-year increase on the back of volume growth and price
increase. The Asphalt segment witnessed decline in revenues
during the first quarter of 2013 due to weak volume and price
The company reported cash and cash equivalents of $188.1 million
as of March 31, 2013, compared with $275.5 million as of Dec 31,
With the housing market gaining momentum, demand for Vulcan's
products, both aggregates as well as non-aggregates, is
improving. As such, the company expects earnings to improve in
2013 on the back of pricing growth, funding stability, aggressive
cost control and volume increase.
Private construction demand is expected to grow. Though the
number of large highway and industrial projects are expected to
grow with increased funding certainty from the new highway bill,
the timing of these projects is difficult to predict.
Aggregates shipments are expected to grow in the range of 1%-5%
in 2013. However, volume growth will be weighted more toward the
second half of the year due to difficult weather comparisons in
the year-ago quarter.
The company expects earnings to improve in all the three
non-aggregates segments in 2013. While Concrete earnings are
expected to gain from improving housing starts, Cement earnings
are expected to get a boost from lower production costs.
Vulcan carries a Zacks Rank #3 (Hold).
Some other stocks, which are currently performing well in the
construction sector include,
Ryland Group Inc.
Eagle Materials Inc.
Texas Industries Inc
). While Ryland carries a Zacks Rank #1 (Strong Buy), Eagle
Materials and Texas Industries carry a Zacks Rank #2 (Buy).
EAGLE MATERIALS (EXP): Free Stock Analysis
RYLAND GRP INC (RYL): Free Stock Analysis
TEXAS INDS (TXI): Free Stock Analysis Report
VULCAN MATLS CO (VMC): Free Stock Analysis
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