Pricing momentum keeps Vulcan Materials moving forward

Aggregate shipments were down in the first quarter at Vulcan Materials Co., but the company continued to benefit from aggregate pricing increases.

According to Vulcan, aggregate shipments declined 2 percent in the first quarter. Shipments across the Southeast and East Coast benefited from more favorable weather, the company says, while significant rainfall throughout most of the quarter significantly impacted California and Texas.

Vulcan’s first-quarter aggregate volumes also benefited from unfavorable fourth-quarter weather that delayed some shipments.

In terms of pricing, Vulcan says actions made at the start of the year resulted in another quarter of accelerating price growth. Freight-adjusted selling prices increased 20 percent, or $3.15 per ton, as compared to the prior year, as Vulcan says all markets realized year-over-year improvement. Adjusting for mix impacts, average selling prices at Vulcan increased 19 percent in the first quarter.

Vulcan’s total revenue attributable to aggregates was up 15.4 percent to $1.29 billion. The company’s gross profit attributable to aggregates was also up – 24.7 percent – to $302.8 million.

“The powerful combination of our aggregates-led business and our commitment to execute on our strategic disciplines resulted in strong earnings growth in the first quarter,” says Tom Hill, chairman and CEO of Vulcan. “Aggregates earnings increased sharply with cash gross profit per ton improving 23 percent and gross margin expanding despite lower shipments and persistent inflationary cost pressures.”

Additionally, Vulcan is increasing its full-year earnings expectations to incorporate the success of its pricing efforts during the first quarter.

“Leading indicators of demand remain mixed, and full-year shipments for 2023 will still ultimately depend upon the depth of the decline in residential construction activity and the timing of highway starts converting to shipments,” Hill says. “Despite a challenging macro-environment, our uniquely positioned aggregates business and our best-in-class execution position us to successfully navigate shifts in demand.”