Vulcan makes first-quarter results public

Vulcan Materials Co. released its 2013 first-quarter results today, noting that its aggregates gross profit was down over the prior year’s first quarter yet emphasizing that the company’s business segments performed as they were expected to.

“Aggregates segment gross profit, while down versus the prior year, was in line with our expectations and up sharply versus the first quarter of 2011,” says Don James, Vulcan’s chairman and CEO. “We expected first-quarter aggregates shipments to be lower than last year when shipments increased 10 percent due to favorable weather and the timing of shipments to several large projects.”

James adds that demand for Vulcan’s products in several markets continues to benefit from recovery in private construction activity, particularly residential.

“Most notably, we realized double-digit percentage increases in first-quarter aggregates shipments in Arizona, California and Florida – driven by demand from housing,” James says. “In other key markets, particularly Texas, shipments also increased, reflecting broad-based recovery across all end-markets. Housing starts, as measured on a seasonally adjusted annual rate, are now more than 1 million, indicating the beginnings of a broad-based recovery in residential construction.

“Growth in residential construction activity, and its traditional follow-on impact to private nonresidential construction, underpins our expectations for volume and earnings improvement in 2013,” he continues. “We continue to expect aggregates shipments in 2013 to increase 1 to 5 percent versus 2012 with the variability due primarily to the timing of the start of several large projects later this year.”

Vulcan’s aggregates gross profit for the first quarter was $25 million, compared with $34 million in the prior year. Aggregates pricing increased 5 percent versus the prior year and helped offset the earnings effect of lower volumes, the company says.

“We believe economic and construction-related fundamentals that drive demand for our products are continuing to improve from the historically low levels created by the economic downturn,” James says. “Leading indicators of private construction activity continue to improve. Residential housing starts in the U.S. are up sharply from a year ago and contract awards for private nonresidential buildings, measured in square feet, are up 16 percent.

“Consequently, aggregates demand in private construction is growing.”