Quarterly revenues, profit up at Vulcan

Vulcan Materials Co. released its third-quarter results, reporting both revenue and gross profit increases over the prior year.

According to Vulcan, third-quarter revenues increased 19 percent to $1.038 billion and gross profit increased 39 percent from the prior year to $291 million. Gross profit and gross profit margins improved in the company’s aggregates, asphalt and concrete segments.

In the aggregates segment, Vulcan says the company delivered its ninth straight quarter of year-over-year improvements in both shipments and per-ton margins. Same-store aggregates shipments rose 7 percent, and same-store freight-adjusted aggregates pricing increased 8 percent from the prior year.

“The ongoing, gradual recovery in construction activity and demand for our products continued in the third quarter,” says Tom Hill, Vulcan’s president and CEO. “In fact, many of our customers now face bottlenecks in completing jobs as scheduled, particularly where significant work was delayed by weather in the first half of the year.

“The pricing environment also remains strong, as customers see improved backlogs and as construction materials suppliers increasingly focus on earning adequate returns on capital deployed,” Hill adds. “Against this backdrop, our teams continue to execute well and to meet rising customer demands efficiently and effectively. Despite cost pressures in certain areas, unit margins continued to rise across most geographic regions.”

According to Vulcan, it continues to see a gradual strengthening in both private and public construction in most of the markets it serves, although supply bottlenecks – particularly availability of skilled trade labor – appear to impact the rate of growth in several areas. Arizona, California, Florida, Georgia, South Carolina and Texas each saw shipment growth in the quarter of 10 percent or higher. In contrast, Vulcan says shipments declined nearly 10 percent in Illinois because large project work declined relative to the prior year’s quarter.

On a trailing 12-months basis, Vulcan says its average selling prices increased 5 percent. The increase in the rate of pricing growth was expected, the company reports, given market conditions and pricing actions taken earlier in the year. Vulcan expects positive pricing momentum to continue into the fourth quarter and into 2016.

“We expect the trends evident thus far in 2015 to extend into 2016,” Hill says. “The gradual recovery in demand continues across most of our markets. The pricing environment remains positive. Our teams continue to convert incremental revenue into incremental gross profit at an impressive rate. Our focus will remain on continuous, compounding improvement – both operational and financial.”