Vulcan Materials Company’s VMC third-quarter 2016 adjusted earnings of $1.01 per share missed the Zacks Consensus Estimate of $1.12 by 9.8%. However, the bottom line increased 9.8% from the prior-year quarter on the back of robust margins.Total revenue of $1,008 million also missed the Zacks Consensus Estimate of $1,109 million by 9.1%. Sales also decreased 3% from the prior-year quarter.Third-quarter 2016 results were hurt by slower-than-expected large project starts and the impact of extremely wet weather conditions on shipments in several key markets.Adjusted gross margin of 35.2% increased 200 basis points (bps). Adjusted EBITDA increased 6.1% year over year to $300.97 million as gross profit margins improved at the Aggregates and Asphalt segments.
VULCAN MATLS CO Price, Consensus and EPS Surprise
Segment DetailsAggregatesRevenues declined 1% year over year to $822 million. Freight-adjusted revenues jumped 2% year over year to $641 million.A noticeable slowdown in the trailing twelve month construction starts in March, the timing of certain large projects, and unfavorable weather patterns led to highly variable third-quarter shipment results across Vulcan-served markets.Aggregates shipments (volumes) decreased 4% owing to gradual recovery in private and public demand across end-markets.Freight-adjusted average sales price climbed 8%.Adjusted gross profit margin of 40.8% increased 90 bps compared to the prior-year quarter.Non-AggregatesTotal revenue in the Concrete segment was $91.1 million, up 3.6% year over year. Concrete segment gross profit was $9 million in the quarter compared with $10 million in the prior-year quarter. Sales volumes were flat with the prior-year quarter level as higher volumes in Arizona and Georgia helped offset lower volumes in Maryland, Texas and Virginia.Revenues at the Asphalt Mix segment were $157.4 million, down 11.9% owing to a decrease in volume. Asphalt segment gross profit was $33 million versus $30 million a year ago. Volumes decreased 11%. However, solid sales and operating disciplines as well as effective materials margin management made up for the volume decline.Total revenue at the Calcium segment (formerly Cement) was $2.4 million, compared with $2.2 million in the prior-year quarter. The Calcium segment reported gross profit of $0.8 million, in line with the prior-year quarter figureGuidanceAlthough the company did not issue any firm guidance, it expects to see broad-based volume and pricing growth accompanied by continued margin expansion in 2017.Vulcan Materials carries a Zacks Rank #5 (Strong Sell).Upcoming ReleasesHere are some companies in the construction sector that are scheduled to report third-quarter results soon.Summit Materials, Inc. SUM is slated to report third-quarter 2016 results on Nov 2. Third-quarter earnings are expected to grow 2.44%.
Quanta Services, Inc. PWR is expected to report third-quarter 2016 results on Nov 3. Earnings are expected to grow 87.83%D.R.Horton, Inc.’s DHI third-quarter earnings is expected to increase 20.4%. The company is scheduled to release results on Nov 8.
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