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Martin Marietta (MLM) to Report Q3 Earnings: What's in Store?
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Martin Marietta Materials, Inc. (MLM - Free Report) is scheduled to report third-quarter 2021 results on Nov 2, before the opening bell.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2.6% but revenues (products and services) beat the same by 0.1%. On a year-over-year basis, earnings of this aggregates producer grew 9.2%, and products and services revenues rose 8.9%. Total quarterly revenues (including Product and Services, and Freight revenues) came in at $1,377.9 million, up 8.4% from the year-ago figure.
Martin Marietta’s earnings topped the consensus mark in three of the last four quarters, with the average surprise being 39.8%.
Trend in Estimate Revision
The Zacks Consensus Estimate for third-quarter earnings has decreased to $4.27 from $4.29 per share over the past seven days. The estimated figure suggests a 9.3% decrease from $4.71 per share reported in the year-ago period. Nonetheless, the consensus mark for revenues is pegged at $1.4 billion, which calls for 13.2% growth from the prior-year reported figure.
Martin Marietta Materials, Inc. Price and EPS Surprise
Martin Marietta’s revenues are expected to have witnessed year-over-year growth in the third quarter, given solid product demand and pricing gains across all product lines. Also, the acquisition of Lehigh Hanson, Inc.’s West Region business during the quarter should have aided its top line. Improved visibility in nonresidential construction and strong residential construction are likely to have been positives.
Infrastructure construction — particularly for aggregates intensive highways, roads and streets — is expected to have remained resilient in the quarter, as contractors advanced projects that have been awarded and funded. Overall, strengthening of the housing market and improvement in the non-residential market are expected to have driven demand. Also, resilient pricing — given growth in all product lines — is an added positive.
The company’s business and earnings have been sensitive to changes in construction spending, particularly housing and public construction in Texas, Colorado, North Carolina, Georgia, Florida as well as Iowa. Higher spending from a number of states that it serves is likely to have aided revenues.
Overall, despite mixed volumes, pricing (strongest in aggregates) is likely to have supported its margins. Higher pricing in upstream aggregates and cement businesses as well as disciplined cost management throughout the business are likely to aid quarterly results.
Meanwhile, similar to other aggregates and cement producers, Martin Marietta is expected to have witnessed weather-related woes (wet weather) in the third quarter, primarily in Texas. Also, inflation from hydrocarbon, rising liquid asphalt, insurance and labor may have been a negative. Higher operating costs and acquisition-related costs may have also been risks.
Other Projections
The Zacks Consensus Estimate for the Building Material segment revenues — which comprise 95% of total revenues — is pegged at $1,425 million, implying 13% growth from a year ago.
The consensus estimate for Magnesia Specialties revenues is currently pegged at $68 million. This suggests an increase from $61 million in the prior-year quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Martin Marietta this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -0.39%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Martin Marietta carries a Zacks Rank #3.
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +7.33% and a Zacks Rank #3.
Fluor Corporation (FLR - Free Report) has an Earnings ESP of +17.24% and holds a Zacks Rank #3.
Installed Building Products, Inc. (IBP - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3.
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Martin Marietta (MLM) to Report Q3 Earnings: What's in Store?
Martin Marietta Materials, Inc. (MLM - Free Report) is scheduled to report third-quarter 2021 results on Nov 2, before the opening bell.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 2.6% but revenues (products and services) beat the same by 0.1%. On a year-over-year basis, earnings of this aggregates producer grew 9.2%, and products and services revenues rose 8.9%. Total quarterly revenues (including Product and Services, and Freight revenues) came in at $1,377.9 million, up 8.4% from the year-ago figure.
Martin Marietta’s earnings topped the consensus mark in three of the last four quarters, with the average surprise being 39.8%.
Trend in Estimate Revision
The Zacks Consensus Estimate for third-quarter earnings has decreased to $4.27 from $4.29 per share over the past seven days. The estimated figure suggests a 9.3% decrease from $4.71 per share reported in the year-ago period. Nonetheless, the consensus mark for revenues is pegged at $1.4 billion, which calls for 13.2% growth from the prior-year reported figure.
Martin Marietta Materials, Inc. Price and EPS Surprise
Martin Marietta Materials, Inc. price-eps-surprise | Martin Marietta Materials, Inc. Quote
Factors to Note
Martin Marietta’s revenues are expected to have witnessed year-over-year growth in the third quarter, given solid product demand and pricing gains across all product lines. Also, the acquisition of Lehigh Hanson, Inc.’s West Region business during the quarter should have aided its top line. Improved visibility in nonresidential construction and strong residential construction are likely to have been positives.
Infrastructure construction — particularly for aggregates intensive highways, roads and streets — is expected to have remained resilient in the quarter, as contractors advanced projects that have been awarded and funded. Overall, strengthening of the housing market and improvement in the non-residential market are expected to have driven demand. Also, resilient pricing — given growth in all product lines — is an added positive.
The company’s business and earnings have been sensitive to changes in construction spending, particularly housing and public construction in Texas, Colorado, North Carolina, Georgia, Florida as well as Iowa. Higher spending from a number of states that it serves is likely to have aided revenues.
Overall, despite mixed volumes, pricing (strongest in aggregates) is likely to have supported its margins. Higher pricing in upstream aggregates and cement businesses as well as disciplined cost management throughout the business are likely to aid quarterly results.
Meanwhile, similar to other aggregates and cement producers, Martin Marietta is expected to have witnessed weather-related woes (wet weather) in the third quarter, primarily in Texas. Also, inflation from hydrocarbon, rising liquid asphalt, insurance and labor may have been a negative. Higher operating costs and acquisition-related costs may have also been risks.
Other Projections
The Zacks Consensus Estimate for the Building Material segment revenues — which comprise 95% of total revenues — is pegged at $1,425 million, implying 13% growth from a year ago.
The consensus estimate for Magnesia Specialties revenues is currently pegged at $68 million. This suggests an increase from $61 million in the prior-year quarter.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Martin Marietta this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of -0.39%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Martin Marietta carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +7.33% and a Zacks Rank #3.
Fluor Corporation (FLR - Free Report) has an Earnings ESP of +17.24% and holds a Zacks Rank #3.
Installed Building Products, Inc. (IBP - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3.