Weather slows Martin Marietta but quarterly net sales still up

Martin Marietta Materials Inc. reported a 4-percent net sales increase Tuesday, when the company released its second-quarter performance results. Pricing growth of all aggregates products and a quarterly net sales record the company’s Specialty Products business established drove Martin Marietta’s growth.

Still, Martin Marietta says wet weather constrained sales in certain regions, particularly in the Midwest and Southeast. The company estimates that precipitation reduced shipment volumes between 1.5 million and 1.7 million tons.

“The second-quarter results show our ability to manage through weather-related disruptions, which did not prevent us from performing well,” says Ward Nye, president and CEO. “More importantly and for the longer term, we are well positioned to leverage a strengthening business environment for our products.

“To that end, we continue to see positive indicators of construction activity, including double-digit growth on a year-to-date basis in the private-sector construction market. Historically, increases in private-sector construction have led to growth in public-sector construction. We anticipate this trend will continue and remain well-positioned to serve these opportunities.”

The nonresidential market, which represented about 30 percent of Martin Marietta’s second-quarter aggregates shipments, increased 7 percent. The growth was attributable to commercial construction, namely office and retail, and was partially offset by a decline in shipments to the energy sector, Nye says. He adds that Martin Marietta’s shipments to the residential market increased 4 percent, accounted for 13 percent of second-quarter aggregates shipments and represented a more normalized and balanced percentage of the company’s overall product sales.

“Our expectation is for further increases in residential volumes as the housing market continues to move toward a more sustainable equilibrium,” Nye says.

The infrastructure market comprised 47 percent of Martin Marietta’s second-quarter aggregates shipments. Lower government spending and wet weather contributed to an 8-percent decline in quarterly volumes to the market, Nye says, and a 1.6-percent overall shipment decline for Martin Marietta’s aggregates business.

“We remain optimistic for increased future public-sector construction activity,” he says. “Similar to the pattern experienced in Texas over the last few years, growth in the residential sector within our company’s geographic areas is expected to stimulate growth in the nonresidential and infrastructure markets that will be necessary to serve an expanding economy and increased population. We see early signs of this cycle developing in both Colorado and Georgia.”