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Martin Marietta (MLM) Tops on Q4 Earnings, Issues ’18 View

Zacks

Martin Marietta Materials, Inc. MLM posted impressive fourth-quarter 2017 results, with earnings and revenues beating the Zacks Consensus Estimate.

Adjusted earnings per share of $1.88 surpassed the Zacks Consensus Estimate of $1.42 by 32.4%. Earnings also improved 21.3% from the prior-year quarter.

Consolidated revenues of $970.5 million rose 2.3% year over year. Freight and delivery revenues totaled $59.2 million, down 1% 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 up 2.1% to $903 million. Aggregates total revenues grew 2.4% to $565.2 million. Ready Mixed Concrete total revenues fell nearly 2.3% to $231.9 million. Cement revenues rose 6.5% to $93.6 million. Asphalt and paving product lines revenues improved 9.6% to $77.7 million.

Shipments (volume) in the aggregates product line declined 0.9% due to lower shipments, thanks to government uncertainty, labor constraints and ongoing project delays, particularly in the Mid-America and West Groups.

Geographically, West Groups’ aggregate volumes dropped 1.5%. The Southeast Group reported a 5.6% increase in volumes on strong nonresidential construction and higher public construction activity.

The Magnesia Specialties segment — which includes magnesium oxide, magnesium hydroxide and dolomite lime products — reported total revenues of $67.5 million, up 5.3% year over year.

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

Margins

Consolidated gross margin increased 290 basis points (bps) to 26.8% owing to the ongoing pricing improvements and benefits from the strategic deployment of capital.

Financials

Martin Marietta ended the quarter with cash and cash equivalents of $1,446.4 million, as of Dec 31, 2017, compared with $50 million as on Dec 31, 2016.

As of Dec 31, 2017, 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 $4.2-$4.4 billion.

Gross profit is projected in the range of $1.04-$1.14 million.

Aggregates Product line total revenues are projected in the range of $2.5-$2.6 billion. Aggregates product line volume is expected in the range of 4-6%.

Cement Product Line total revenues are estimated in the band of $415-$445 million.

Ready Mixed Concrete and Asphalt/Paving Product Lines total revenues are projected in the band of $1.37-$1.45 billion.

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

Zacks Rank & Peer Releases

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

PulteGroup’s PHM fourth-quarter 2017 adjusted earnings per share of 85 cents beat the Zacks Consensus Estimate of 84 cents by 1.2%. Also, earnings reflect a 27% jump from 67 cents in the year-ago quarter.

NVR, Inc NVR reported fourth-quarter 2017 adjusted earnings of $43.41 per share, missing the Zacks Consensus Estimate of $48.95 by 11.3%. Without the adjustment, NVR reported earnings of $28.88, down 24% year over year.

Upcoming Release

Vulcan Materials Company VMC is scheduled to release quarterly numbers on Feb 16.

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