Vulcan Materials Company
) posted net earnings of 3 cents per share in the fourth quarter
of 2012 in contrast to the Zacks Consensus Estimate of a loss of
11 cents per share by a wide margin. However, the loss was
narrower than the prior year quarter's loss of 20 cents as the
top-line decline was offset by margin gains.
Total revenue of $608.4 million surpassed the Zacks Consensus
Estimate of $593 million by 2.6%, due to strong pricing rise in
all the segments. However, total revenue declined 1.0% from prior
year quarter, dragged down by uneven volume performance.
Consolidated gross margins improved 90 basis points in the
quarter on the back of lower net sales. Total selling,
administrative and general (SAG) expense declined 6.7% in the
quarter to $66.9 million due to the company's cost reduction
efforts. Adjusted EBITDA was $90 million, versus $95 million from
the prior-year quarter, driven by improved gross margins and
lower SAG costs.
The construction Aggregates segment includes crushed stone, sand
and gravel and recycled concrete. The segment serves markets in
U.S. states, the District of Columbia, the Bahamas and Mexico.
The company also sells railroads, ballast for construction and
maintenance of railroad track and riprap and jetty stone for
erosion control along waterways.
Revenues of the segment were $376.2 million in the fourth quarter
2012, down 0.6% y/y. The drop in revenue was due to a 3.0%
decline in shipment. Average sales price grew 4% to $10.45 from
the prior-year quarter due to increase in prices in all the
The key markets of North Carolina, Arizona, Florida and Texas
showed strong double-digit volume gains on the back of
infrastructure construction activity, mainly highways and
improvement in private sector work. However, there was decline in
volumes in California, Virginia, Midwest and Georgia, owing to
less number of large projects compared to the prior-year quarter.
Revenues in the Concrete segment were $103.1 million in the
fourth quarter 2012, up 11% y/y, driven by 10.6% rise in volume
of ready-mixed concrete, partially offset by 0.13% decline in
average sales price to $91.38.
Revenues in the Asphalt Mix segment were $84.9 million in the
fourth quarter of 2012, down 10.2% y/y, driven by double digit
decline in volume. Asphalt mix volume declined 11.8% from the
prior year. Average sales price increased slightly by 1.4% to
$56.07 from the prior-year quarter. Revenues in the Cement
segment were $10.8 million, down 12.9% y/y.
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VULCAN MATLS CO (VMC): Free Stock Analysis
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Vulcan Materials Company posted a net loss of 42 cents per share
in the full year 2012, narrower than the Zacks Consensus Estimate
of a loss of 44 cents per share. However, the loss was narrower
than the prior year's loss of 58 cents. Total revenue of $2.57
billion lagged the Zacks Consensus Estimate of $2.43 billion.
Total revenue improved very slightly from the prior year level.
As the housing market is gaining momentum, the demand for
Vulcan's products is improving. As such, the company is
optimistic about fiscal 2013 results on the back of pricing
growth, funding stability, cost control and volume increase. The
company expects the aggregate margins and profitability to
improve in the upcoming quarters.
Vulcan carries a Zacks Rank #3 (Hold).
Other stocks that are doing well are
) carrying a Zacks Rank #1 (Strong Buy) and
CEMEX, S.A.B. de C.V.
Texas Industries Inc.
) both carrying a Zacks Rank #2 (Buy).