Vulcan’s aggregates earnings up in second quarter

By |  August 5, 2014

Vulcan Materials Co. released its second quarter earnings results for the period ending June 30. Compared with last year’s second quarter results, the company’s net sales were up 9 percent, or $60 million, whereas gross profit was up 32 percent, or $42 million.

Gross profit from the company’s aggregates segment totaled $162 million, an increase of 27 percent, or $35 million. Revenues were $596 million compared with $508 million the second quarter of last year and include sales generated from producing and selling aggregates tons as well as revenues from aggregates distribution, delivery and other services, including truck brokerage services. The company says it recently expanded its truck brokerage services so it could better serve customers and generate additional earnings from each ton shipped. Gross profit margin on growth in revenue associated with producing and selling aggregates tons was in line with its expectations, it says. Revenue growth from its transportation-related activities contributed to earnings, but as expected, at a lower margin percentage.

Aggregates shipments increased 10 percent compared with the prior year. Key markets reporting more than 15 percent volume growth included Georgia, Illinois, North Carolina, Texas and Virginia. Florida and Southern California grew 11 percent and 12 percent, respectively.

Freight-adjusted pricing for aggregates increased 3 percent, or $0.33 per ton, as compared with last year’s second quarter, a price improvement for virtually all markets. This widespread price improvement, combined with reductions in the company’s production costs shipped, drove a $0.49 per ton, or 15 percent, increase in gross profit.

“We are maintaining our outlook for full year freight-adjusted aggregates pricing to improve 3 to 5 percent from the prior year,” says Tom Hill, Vulcan’s president and CEO. “The overall pricing outlook for our aggregates products continues to improve with the recovery in demand for construction materials. As we look ahead to the second half of the year, we expect continuing margin improvement driven by price growth, operating leverage, and other cost controls.”

 

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