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Vulcan Materials Company VMC is scheduled to release fourth-quarter 2024 results on Feb. 18, before the opening bell.
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In the last reported quarter, the company’s adjusted earnings and revenues missed the Zacks Consensus Estimate by 5.1% and 1.3%, respectively. On a year-over-year basis, earnings and revenues declined 3.1% and 8.3%, respectively.
Vulcan’s earnings topped the consensus mark in two of the last four quarters and missed on other two occasions, with an average surprise of 0.7%.
Vulcan Materials Company Price and EPS Surprise
Vulcan Materials Company price-eps-surprise | Vulcan Materials Company Quote
How Are Estimates Placed for Vulcan Stock?
The Zacks Consensus Estimate for VMC’s fourth-quarter earnings per share has remained unchanged at $1.76 over the past 60 days. The estimated figure indicates a rise of 20.6% from the year-ago quarter.
The consensus estimate for revenues is pegged at $1.83 billion, suggesting a 0.4% year-over-year decline.
Factors Influencing VMC’s Q4 Results
Vulcan’s fourth-quarter shipment volumes will be significantly influenced by the number of good-weather shipping days. October started slowly due to Hurricane Milton but rebounded as the month progressed. During the third-quarter earnings call, the company highlighted that it remains cautiously optimistic that if favorable weather persists, shipping rates could stabilize.
Pricing should remain the bright spot. The company’s strong pricing power is attributable to its Vulcan Way of Selling discipline, which has enabled it to consistently expand cash gross profit per ton, even in quarters with declining volumes. This suggests that even if fourth-quarter volume growth remains sluggish, pricing should help support profitability.
Apart from strong pricing gains in aggregates, acceleration in infrastructure spending and accretive acquisitions are likely to have offset the headwinds. Infrastructure construction, particularly for aggregates-intensive highways, roads and streets, might have also contributed to its performance in the quarter. Vulcan sees sustained growth from the Infrastructure Investment and Jobs Act and state and local funding. Texas and California, two of its largest states, are at record levels for project lettings, and additional funding in Georgia, Tennessee, Florida, and South Carolina is expected to support long-term public construction growth.
Private construction remains mixed, with warehouse activity remaining a headwind. However, data centers and manufacturing construction remain strong, and residential remains soft.
Moreover, its acquisition of Whitaker (closed in the second quarter) is likely to have contributed to the company’s top line in the third quarter.
Operational efficiency remains a focus, with the company continuing to implement its Vulcan Way of Operating strategies to improve plant throughput and cost control.
The Aggregates business, including crushed stone, sand and gravel and other aggregates (which accounted for 78.5% of total third-quarter revenues), has been a major contributor to top-line growth. Our model suggests that net sales from the Aggregates segment will grow 4.9% to $1.48 billion from a year ago. We also predict Aggregates volumes to decline 6% but Aggregates price is likely to grow 11.6% in the quarter.
Our model suggests net sales from the Asphalt Mix segment (which accounted for 19% of total revenues in the third quarter) to be $309 million, indicating 7.9% growth from a year ago. We also predict volumes for the Asphalt Mix unit to grow 3% year over year and price to increase 4.7% year over year.
We also anticipate revenues from the Concrete segment (which accounted for 8.7% of total revenues in the third quarter) to decline 40.8% to $151.5 million from a year ago. We also predict Concrete volumes to decline 46.7% year over year but Concrete prices to grow 7% year over year.
Meanwhile, higher cost inflation, the shortage of skilled labor and rising wage costs are expected to have affected VMC’s fourth-quarter margins to some extent.