Quarterly sales, earnings up at Martin Marietta

By |  August 8, 2016

martin marietta logoMartin Marietta Materials Inc. released its second-quarter performance results.

According to the company, net sales increased nearly 8 percent and gross profit and net earnings increased 23 percent and 49 percent, respectively.

“The record results for the quarter reflect our continued ability to capitalize on improving economic conditions across our markets, coupled with our disciplined approach to cost management and operational excellence,” says Ward Nye, chairman, president and CEO of Martin Marietta.

According to the company, aggregates product-line pricing growth and cost discipline both led to a 340-basis-point increase in the company’s consolidated gross margin, excluding freight and delivery revenues. The gross margin expansion was achieved despite record or near-record rainfall and its effects in many of Martin Marietta’s key markets, such as Texas, North Carolina and Colorado, Nye adds.

Domestic job growth remains a strong catalyst for the company’s construction activity, the company adds.

“The southeastern United States’ steady economic recovery is gaining momentum, with North Carolina, Georgia and Florida all ranked in the top 10 states nationally for employment growth,” Nye says. “For the second quarter, these market conditions, among others, helped drive aggregates product-line volume growth.”

Aggregate shipments in Martin Marietta’s West Group were hindered by extremely wet weather in Texas throughout the majority of the second quarter. As previously predicted by the National Oceanic and Atmospheric Administration, the El Niño effect concluded in May 2016. In addition, the reduction of shale-related shipments compared with the same time the previous year and lower ballast shipments also influenced the West Group’s second quarter results, Martin Marietta reports.

Aggregate product-line shipments to the infrastructure market comprised 43 percent of quarterly volumes for Martin Marietta, and they increased 1.3 percent. According to the company, growth was led by the Southeast Group, which increased 8.9 percent. The Mid-America and West Groups were impacted by significant rainfall and project delays in April and May, which deferred shipments and led to flat public-sector volumes.

The nonresidential market accounted for 33 percent of quarterly aggregate product-line shipments and increased 2.8 percent. The Mid-America Group achieved a 13.7 percent increase, followed by an increase of 1.6 percent in the Southeast Group.

The residential market accounted for 17 percent of quarterly aggregate product-line shipments. Volumes to this segment increased 10.8 percent due to the continued expanding housing recovery, notably in the southeastern region. Although housing activity in the United States remains below historic averages, strong growth in permits, starts and completions among Martin Marietta’s top states reflect steady momentum in housing construction, Nye says.

Overall, the aggregate product-line shipments increased 1.3 percent. Geographically, the Mid-America Group led this growth, which achieved a 4.9 percent increase. The Southeast Group posted a 1.9 percent increase. Both of these growths offset the weather-impacted decline in the West Group.

“We remain highly optimistic as we look toward the second half of the year and well beyond,” Nye adds. “Our team is poised to capitalize on increasing demand, and we expect exceptional performance from all of our businesses.”

About the Author:

Megan Smalley is the associate editor of Pit & Quarry. Contact her at msmalley@northcoastmedia.net or 216-363-7930.

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