Martin Marietta reports first-quarter results

Martin Marietta Materials Inc. released its first-quarter report today, noting that the company’s results were in line with management’s expectations for the winter months.

“Due to a more normal winter weather pattern, and in fact, more severe and extended in some parts of the country, aggregates shipments declined 8.8 percent compared with the prior-year quarter,” says Ward Nye, Martin Marietta’s president and CEO. “The prior year benefitted from an unseasonably warm winter, accelerating the start of construction projects in many of our markets into the first quarter.”

Nye adds that Martin Marietta’s decline in aggregates volumes directly correlated to the company’s gross profit reduction.

“Notably, however, our aggregates business continues to experience pricing growth in each reportable segment and in each product line,” Nye says. “This trend bodes well for the future performance of this business as shipments pick up during the remainder of the year. Our specialty products business benefitted from the new lime kiln completed in the fourth quarter of 2012 and established new records for net sales and gross profit.”

Additionally, Martin Marietta’s aggregates product line pricing improved 5.7 percent. The company’s group in the west achieved the strongest growth at 8.7 percent.

“The improving housing market, an important trend for the economy generally and the aggregates industry specifically, is leading the current economic recovery,” Nye says. “Housing starts and completions for the trailing 12 months are up approximately 47 percent and 36 percent, respectively, over the comparable period for the prior year.”

For the quarter, the residential end-use market accounted for 14 percent of Martin Marietta’s aggregates product line shipments, which, according to Nye, are in line with the company’s historical average.

“The infrastructure market continues to represent the largest end use for the aggregates product line and comprised 42 percent of volumes for the quarter,” he says. “We are encouraged that highway obligations for fiscal 2013 through March were at the highest level since 2010 and up 28 percent over the prior-year period.”

The nonresidential market is Martin Marietta’s second-largest end use and accounted for 33 percent of the company’s quarterly aggregates product line shipments.

“While nonresidential volumes were down 8 percent, we continue to benefit from strong shipments to the energy sector,” Nye says.