Vulcan Materials (VMC) Shares Increase on Q2 Earnings Beat
Vulcan Materials Company VMC reported impressive results for second-quarter 2020. Both the top and bottom lines surpassed the Zacks Consensus Estimate backed by solid operational execution despite some disruptions in construction activity during the quarter. Shares of the company gained 2.1%, following the earnings release.
Inside the Headlines
Vulcan Materials — which is one of the largest producers of construction aggregates — reported adjusted earnings of $1.60 per share, which surpassed the consensus mark of $1.38 by 15.9%. Also, the company’s bottom line improved 8.1% from the year-ago level on the back of prudent cost-control efforts and higher pricing in aggregates.
Total revenues of $1,322.6 million topped the consensus mark by 1% but decreased 0.4% year over year.
Vulcan Materials Company Price, Consensus and EPS Surprise
Segments in Detail
Revenues from the segment increased 1% year over year to $1,070.6 million owing to higher pricing, partly offset by lower shipments.
Aggregate shipments (volumes) were down 2% year over year as shipping patterns varied widely across the company's footprint as a result of economic uncertainty. Also, wet weather added to the woes.
During the quarter, freight-adjusted average sales price increased 3% from the prior-year quarter. Freight-adjusted revenues also rose 1% from the prior-year quarter to $814.7 million.
Gross profit of $351.2 million was up 6.7% year over year, backed by widespread growth in pricing and effective cost control. Gross margin — as a percentage of segment sales — improved 220 basis points (bps) to 42.3% (excluding freight & delivery).
Asphalt, Concrete and Calcium
Revenues from the Asphalt segment were $223 million, up 9.8% year over year. The segment recorded gross profit of $30.5 million, up 10.4% from the year-ago quarter. Although asphalt volumes for the quarter declined 5% from a year ago, it captured the benefits from lower liquid asphalt costs.
Total revenues from the Concrete segment were $100.7 million, down 3% year over year. However, gross profit totaled $14.2 million, up 10.4% year over year. Shipments were down 4% year over year. Average selling prices grew 1% year over year.
Total revenues from the Calcium segment were down 5.7% from the prior-year figure to $1.9 million. The segment reported gross profit of $0.7 million, down 18.5% from the prior-year quarter.
Selling, Administrative and General or SAG expenses — as a percentage of total revenues — improved 31 bps in the quarter. The improvement was mainly driven by cost-reduction initiatives, lower incentive compensation costs and general cost control in response to the COVID-19 pandemic. Adjusted EBIT grew 10.7% from the prior-year quarter to $308.3 million. Adjusted EBITDA was also up 9.6% year over year to $407.8 million.
As of Jun 30, 2020, cash and cash equivalents were $816.8 million, up from $26 million in the comparable year-ago period and $271.6 million at 2019-end. Long-term debt was $2.79 billion, slightly up from the year-ago quarter and 2019-end.
During the quarter, Vulcan Materials returned $45 million to shareholders through dividends, reflecting a 10% increase from the prior year. However, it did not repurchase any shares in the quarter.
Despite the fact that the economic environment is showing signs of improvement, the pandemic’s effect on demand and the broader economy remains uncertain. As a result, Vulcan Materials did not re-issue any earnings guidance.
Zacks Rank & Peer Release
Vulcan Materials — which shares space with Summit Materials, Inc. SUM and Eagle Materials Inc. EXP in the Zacks Building Products - Concrete and Aggregates industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Martin Marietta Materials, Inc. MLM reported better-than-expected second-quarter 2020 earnings and revenues (products and services) backed by higher demand and operational excellence.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>
Click to get this free report
Vulcan Materials Company (VMC): Free Stock Analysis Report
Eagle Materials Inc (EXP): Free Stock Analysis Report
Martin Marietta Materials, Inc. (MLM): Free Stock Analysis Report
Summit Materials, Inc. (SUM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Latest Markets Videos
- Stimulus Update: MIllions Will Get a Stimulus Check in June. Are You One of Them?
- Social Security Checks Could Soar in 2023: Here's How Much Extra Seniors Might Receive
- Better Buy: Dogecoin vs. Terra Classic vs. Terra (LUNA)?
- Bitcoin Uses 50 Times Less Energy Than Traditional Banking, New Study Shows