Aggregate producers fail to meet Wall Street expectations

The Associated Press (AP) headlines read the same:
– Vulcan misses Street 2Q forecasts
– Martin Marietta misses Street 2Q forecasts

The two largest producers of aggregate in the United States both missed Wall Street expectations with their second-quarter numbers, and, for both companies, weather played a factor.

Vulcan Materials posted revenue for the quarter of $1.03 billion, while AP says three analysts surveyed by Zacks expected $1.08 billion. Vulcan Materials’ shares have declined almost 5 percent since the beginning of the year, says the report, while the S&P 500 index has climbed 11 percent.

Vulcan Materials says extreme wet weather across the Southeast and weaker demand in Illinois and coastal Texas contributed to a 2 percent decline aggregates shipments compared to the prior year quarter. The company has lowered its expectations for full-year 2017 aggregate shipments.

But Tom Hill, chairman and CEO, remains optimistic: “Our confidence in the longer term outlook for our business remains strong. Our industry-leading core profitability in aggregates keeps improving.”

Weather also impacted Martin Marietta.

The company posted adjusted revenue of $996.3 million, also falling short of Wall Street forecasts. AP reports that three analysts surveyed by Zacks expected $1.01 billion. Martin Marietta’s shares have risen 2 percent since the beginning of the year.

Ward Nye, chairman, president and CEO, says, “We overcame challenging operating conditions in several key states, as near-record levels of precipitation in North Carolina, South Carolina, Georgia and Florida negatively impacted aggregates shipments and operating efficiencies in our historically most profitable geographic areas.

“Looking ahead, Nye continues, “we are optimistic about the remainder of 2017 and beyond due to increased momentum across almost our entire geographic footprint and the positive near- and medium-term outlooks expressed by our customers.”