Martin Marietta (MLM) Misses On Q1 Earnings, Raises '18 View

Martin Marietta Materials, Inc. (NYSE:MLM) reported dismal first-quarter 2018 results, with earnings missing the Zacks Consensus Estimate and declining year over year.

Earnings per share of 16 cents missed the Zacks Consensus Estimate of 25 cents by 36%. Earnings also declined 76.1% from the prior-year quarter.

Total revenues of $802 million surpassed the consensus mark by a meager 0.1% and fell 5% year over year. Freight and delivery revenues totaled $48.7 million, down 5.6% year over year.

Segment Discussion

The Building Materials business includes aggregates, cement, ready mixed concrete, asphalt and paving product lines.

The segment’s total revenues were down 5.5% to $732.7 million. Aggregates total revenues fell 5.8% to $425 million. Ready Mixed Concrete total revenues fell nearly to $218.5 million from $222.3 million in the prior-year quarter. Cement revenues fell to $89.2 million from $93.6 million in the year-ago quarter. Asphalt and paving product lines revenues fell 24.4% to $16.4 million.

Shipments (volume) in the aggregates product line declined 7.9% as colder-than-normal weather restricted outdoor contractors to work during the winter.

Geographically, West Groups’ aggregate shipments dropped 9.9%. The Southeast Group reported a 12.4% fall in volumes due to winter weather and poor railroad performance.

The Magnesia Specialties segment — which includes magnesium oxide, magnesium hydroxide and dolomite lime products — reported total revenues of $265 million, down 1.9% year over year.

Martin Marietta Materials, Inc. Price, Consensus and EPS Surprise

Margins

Consolidated gross margin contracted 360 basis points to 13.8%.

Financials

Martin Marietta ended the quarter with cash and cash equivalents of $1,422.4 million as of Mar 31, 2018 compared with $1,446.4 million as on Dec 31, 2017.

As of Mar 31, 2018, 62.9 million shares of the company’s common stock were outstanding and 14.7 million shares remain under the current repurchase authorization.

2018 Guidance

Total revenues are expected in the band of $4.3 billion to $4.5 billion ($4.2 billion to $4.4 billion expected earlier).

Gross profit is projected in the range of $1.1-$1.12 million ($1.04-$1.14 million expected earlier).

Aggregates Product line total revenues are projected in the range of $2.63-$2.74 billion ($2.5-$2.6 billion expected earlier). Aggregates volume is expected in the range of 11-14% (4-6% projected earlier).

Cement total revenues are still estimated in the band of $415 million to $445 million.

Magnesia Specialties Business net sales are still expected between $265 million and $270 million.

Zacks Rank

Martin Marietta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Peer Releases

PulteGroup Inc. (NYSE:PHM) reported impressive first-quarter 2018 results, with earnings and revenues beating the Zacks Consensus Estimate.

NVR, Inc. (NYSE:NVR) also reported solid first-quarter 2018 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate.

Lennar Corporation (NYSE:LEN) surpassed earnings and revenues expectations in the first quarter of fiscal 2018. The top and the bottom lines grew considerably on higher orders along with improved gross margins and SG&A expenses.

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