Aggregate revenues down at Martin Marietta in first-quarter 2018

Nye

Aggregate product revenues decreased in the first quarter of the year at Martin Marietta, the company revealed upon reporting its latest quarterly results.

First-quarter aggregate pricing, however, improved 2.3 percent.

According to Martin Marietta, its first-quarter aggregate shipments returned to levels that are more in line with historical trends and patterns. Winter weather traditionally limits the ability of outdoor contractors to perform work during the winter months, the company says.

Accordingly, Martin Marietta’s 2018 first-quarter operating results compare unfavorably to the first quarters of 2017 and 2016, when the company benefitted from back-to-back unseasonably favorable weather conditions.

“As we start the year, we are encouraged by ongoing customer optimism and our first-quarter results, both of which are consistent with our expectations,” says Ward Nye, chairman, president and CEO of Martin Marietta, who also offered his latest outlook for the remainder of 2018.

For the quarter, aggregate product revenues decreased 5.8 percent at Martin Marietta, reflecting a 7.9 percent decline in shipments. Aggregate pricing improved 2.3 percent.

Martin Marietta’s Mid-America Group generated aggregate pricing growth of 4.9 percent, driven by continued price discipline and favorable product mix. Pricing improved 2.2 percent for the company’s Southeast Group, as winter weather and poor railroad performance constrained long-haul shipments to distribution yards in Florida and Georgia.

Product mix, reduced commercial rail-shipped volumes and various competitive dynamics in portions of Texas offset robust pricing growth in Colorado, the company adds. This resulted in a modest price increase for Martin Marietta’s West Group.

Traditional cold and wet conditions, coupled with railroad inefficiencies, also contributed to a 12.4 percent shipment decline for Martin Marietta’s Southeast Group, as well as a 4.7 percent decline for the West Group. Mid-America Group shipments decreased 9.9 percent.

By market, Martin Marietta’s aggregate shipments for infrastructure decreased 11 percent in the first quarter. Aggregate shipments to the nonresidential market decreased 10 percent overall, driven by weather-impacted challenges in office and retail construction activity. Aggregate shipments to the residential market, which tends to be the least weather-constrained end use, were flat for the first quarter.

Aggregate shipments to Martin Marietta’s ChemRock/rail market, meanwhile, declined 11 percent. Reduced ballast shipments reflect weather constraints, the company says, and the timing of certain purchases by East Coast railroads in the prior-year quarter.