Martin Marietta sets high marks in third-quarter 2018

Nye

Martin Marietta Materials achieved third-quarter records in revenues, gross profit and earnings per diluted share as shipments and pricing rose for aggregate, cement and ready-mixed concrete.

The company’s total third-quarter revenues totaled about $1.22 billion, up from about $1.09 billion in the third quarter of 2017. Martin Marietta’s third-quarter gross profit was about $313 million, up from about $292 million in the prior-year’s third quarter.

“Our record third-quarter results demonstrate Martin Marietta’s strong execution as we capitalized on the improving strength of the current construction cycle while successfully managing through near-term challenges,” says Ward Nye, chairman, president and CEO of Martin Marietta.

In aggregate, Martin Marietta achieved third-quarter revenues of $687.8 million with a gross profit for the quarter of $209.1 million.

Aggregate volume growth accelerated during the third quarter’s first two months, reflecting strong underlying product demand – most notably in Texas, North Carolina, Georgia and Iowa. Despite clear market strength, extreme weather temporarily hindered construction activity, Martin Marietta says. Record precipitation in Texas, compounded by disruptions from Hurricane Florence in the Carolinas, adversely impacted September’s aggregate shipment, production and overall efficiency levels.

“Aggregates, cement and ready-mixed concrete shipments meaningfully accelerated in July and August under normal operating conditions,” Nye says. “Pricing also improved, highlighting robust product demand across our geographic footprint.”

Martin Marietta’s heritage aggregate volume and pricing improved 3.8 percent and 2.9 percent, respectively, excluding the third-quarter 2017 shipments from the company’s Forsyth, Georgia, quarry that was divested in April 2018.

Shipments for Martin Marietta’s Mid-America Group heritage operations increased 5.4 percent, driven by several large public and private construction projects in North Carolina and windfarm activity in Iowa. This growth was partially offset by disruptions from Hurricane Florence. Weather and product mix limited heritage pricing gains to 2.8 percent, according to the company.

Shipments for the Southeast Group heritage operations increased 11.9 percent, excluding third-quarter 2017 shipments from the Forsyth, Georgia, quarry that was divested in April of this year. This improvement was driven by strong construction activity in north Georgia and improving long-haul shipments from Florida distribution yards.

Shipments declined slightly in the West Group, driven by record precipitation in September in Dallas/Fort Worth and San Antonio, as well as project delays in Colorado. The Southwest Division achieved double-digit volume growth heading into September, underscoring the region’s healthy construction market. West Group pricing improved 3.1 percent, reflecting robust pricing in Colorado that was partially offset by product mix and a lower percentage of higher-priced rail-shipped volumes in Texas, the company adds.

Martin Marietta is confident the ongoing construction cycle will continue to promote sustainable and steady growth for the foreseeable future, fueled by strong underlying demand and the long-awaited arrival of increased public-sector activity.

“A compelling need for greater infrastructure investment exists to address much-needed maintenance and improvements, support economic growth and rebuild from weather events,” Nye says. “We are encouraged by the recent and ongoing actions state and local governments are taking to secure additional funding for transportation projects.”