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Why Is Vulcan (VMC) Up 6.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Vulcan Materials (VMC - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vulcan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Vulcan Materials Company reported third-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate, after beating the same in the preceding two quarters. Both the metrics also declined year over year. The company’s results for the quarter were impacted by the coronavirus pandemic and wet weather, which also resulted in lower shipment levels.
Inside the Headlines
Vulcan Materials — which is one of the largest producers of construction aggregates — reported adjusted earnings of $1.56 per share, which missed the consensus mark of $1.63. Further, the company’s bottom line declined 7.1%.
Total revenues of $1,309.9 million lagged the consensus mark of $1,376 million and declined 7.2% year over year.
Segments in Detail
Aggregates
Revenues from the segment decreased 7.4% year over year to $1,048.9 million due to lower shipments.
Aggregate shipments (volumes) were down 8% year over year as shipping patterns varied widely across the company's footprint as a result of economic uncertainty. Also, wet weather and wildfires in major markets added to woes.
For the quarter under review, freight-adjusted average sales price increased 2% from the prior-year period. Freight-adjusted revenues declined 5.9% from the prior-year quarter to $858.5 million.
Gross profit of $337.9 million was down 5.4% year over year. Adjusted gross margin — as a percentage of segment sales — improved 10 basis points (bps) to 41% (excluding freight & delivery).
Asphalt, Concrete and Calcium
Revenues from the Asphalt segment were $235.2 million, down 13% year over year. The segment reported gross profit of $30.2 million, up 9.3% from the year-ago quarter driven by increase in material margin. Although asphalt volumes for the quarter declined 13% from a year ago, it benefited from marginal increase in prices and cost containment.
Total revenues from the Concrete segment were $102.8 million, down 9% year over year. However, gross profit totaled $12 million, up 20% year over year. Shipments were down 11% year over year. Average selling prices grew 3% year over year.
Total revenues from the Calcium segment were down 36% from the prior-year figure to $1.4 million. The segment reported gross profit of $0.2 million, down 69.5% from the prior-year quarter.
Operating Highlights
Selling, Administrative and General or SAG expenses — as a percentage of total revenues — increased 10 bps for the quarter. Adjusted EBIT was down 2.6% from the prior-year quarter to $308.3 million.
Adjusted EBITDA was also down 0.8% year over year to $403.5 million.
Financials
As of Sep 30, 2020, cash and cash equivalents were $1,084.1 million, up from $90.4 million in the comparable year-ago period and $271.6 million at 2019-end. Long-term debt was $2.77 billion, slightly down from the year-ago quarter and 2019-end.
During the reported quarter, Vulcan Materials returned $135 million to shareholders through dividends, reflecting an increase of 10% from the prior year. So far this year, the company has repurchased $26 million in common stock.
View
Despite the fact that the economic environment is showing signs of improvement, the pandemic’s effect on demand and the broader economy remains uncertain. The company anticipates adjusted EBITDA in the range of $1.285-$1.315 billion in 2020. It is optimistic about the pricing environment in 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Vulcan has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vulcan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Vulcan (VMC) Up 6.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Vulcan Materials (VMC - Free Report) . Shares have added about 6.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Vulcan due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Vulcan Materials (VMC - Free Report) Q3 Earnings & Revenues Miss Estimates
Vulcan Materials Company reported third-quarter 2020 results, wherein both earnings and revenues missed the Zacks Consensus Estimate, after beating the same in the preceding two quarters. Both the metrics also declined year over year. The company’s results for the quarter were impacted by the coronavirus pandemic and wet weather, which also resulted in lower shipment levels.
Inside the Headlines
Vulcan Materials — which is one of the largest producers of construction aggregates — reported adjusted earnings of $1.56 per share, which missed the consensus mark of $1.63. Further, the company’s bottom line declined 7.1%.
Total revenues of $1,309.9 million lagged the consensus mark of $1,376 million and declined 7.2% year over year.
Segments in Detail
Aggregates
Revenues from the segment decreased 7.4% year over year to $1,048.9 million due to lower shipments.
Aggregate shipments (volumes) were down 8% year over year as shipping patterns varied widely across the company's footprint as a result of economic uncertainty. Also, wet weather and wildfires in major markets added to woes.
For the quarter under review, freight-adjusted average sales price increased 2% from the prior-year period. Freight-adjusted revenues declined 5.9% from the prior-year quarter to $858.5 million.
Gross profit of $337.9 million was down 5.4% year over year. Adjusted gross margin — as a percentage of segment sales — improved 10 basis points (bps) to 41% (excluding freight & delivery).
Asphalt, Concrete and Calcium
Revenues from the Asphalt segment were $235.2 million, down 13% year over year. The segment reported gross profit of $30.2 million, up 9.3% from the year-ago quarter driven by increase in material margin. Although asphalt volumes for the quarter declined 13% from a year ago, it benefited from marginal increase in prices and cost containment.
Total revenues from the Concrete segment were $102.8 million, down 9% year over year. However, gross profit totaled $12 million, up 20% year over year. Shipments were down 11% year over year. Average selling prices grew 3% year over year.
Total revenues from the Calcium segment were down 36% from the prior-year figure to $1.4 million. The segment reported gross profit of $0.2 million, down 69.5% from the prior-year quarter.
Operating Highlights
Selling, Administrative and General or SAG expenses — as a percentage of total revenues — increased 10 bps for the quarter. Adjusted EBIT was down 2.6% from the prior-year quarter to $308.3 million.
Adjusted EBITDA was also down 0.8% year over year to $403.5 million.
Financials
As of Sep 30, 2020, cash and cash equivalents were $1,084.1 million, up from $90.4 million in the comparable year-ago period and $271.6 million at 2019-end. Long-term debt was $2.77 billion, slightly down from the year-ago quarter and 2019-end.
During the reported quarter, Vulcan Materials returned $135 million to shareholders through dividends, reflecting an increase of 10% from the prior year. So far this year, the company has repurchased $26 million in common stock.
View
Despite the fact that the economic environment is showing signs of improvement, the pandemic’s effect on demand and the broader economy remains uncertain. The company anticipates adjusted EBITDA in the range of $1.285-$1.315 billion in 2020. It is optimistic about the pricing environment in 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Vulcan has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Vulcan has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.