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What to Expect From Vulcan Materials (VMC) This Earnings Season

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Vulcan Materials Company (VMC - Free Report) is scheduled to release fourth-quarter 2021 results on Feb 16, before the opening bell.

In the last reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate by 6.7% but revenues beat the same by 4.1%. On a year-over-year basis, earnings declined 1.3% but revenues increased 15.8%.

Vulcan Materials’ earnings topped the consensus mark in two of the last four quarters and missed the same on the other two occasions, with the average surprise being 15.9%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised upward to $1.19 from $1.15 over the past 60 days. Nonetheless, this indicates an increase of 11.2% from the year-ago quarter. The consensus estimate for revenues is pegged at $1.60 billion, suggesting 36.1% year-over-year growth.

Vulcan Materials Company Price and EPS Surprise

Vulcan Materials Company Price and EPS Surprise

Vulcan Materials Company price-eps-surprise | Vulcan Materials Company Quote

Factors to Note

Solid momentum in residential construction activities is expected to have benefited Vulcan Materials’ fourth-quarter performance. This apart, a slight non-residential recovery and incremental federal funding from the recently enacted Infrastructure Investment and Jobs Act should have acted as tailwinds. Also, resilient pricing — given growth in all product lines — is expected to have supported growth.

Also, higher spending from a number of states that it serves is likely to have aided revenues. The aggregates business (including crushed stone, sand, and gravel along with other aggregates) has been a major contributor to revenue growth. Efforts to enhance operational excellence, acquisition synergies and cost-control measures are expected to have aided the bottom line to some extent. Vulcan Materials closed the previously announced acquisition of U.S. Concrete, thereby enhancing its aggregates-led business with additional geographic reach. U.S. Concrete is now a wholly-owned subsidiary of Vulcan.

Again, higher shipments due to favorable winter weather should have provided support to the company’s quarterly performance.

Yet, higher diesel and fuel costs may have been risks. Inflation from hydrocarbons, rising liquid asphalt costs, insurance and labor might have added to the negatives.

Other Projections

The Zacks Consensus Estimate for net sales from the Aggregates segment (accounting for 81% of total revenues) is pegged at $1,060 million, indicating an increase from $957 million a year ago.

The consensus mark for net sales from the Concrete segment (accounting for 8% of total revenues) is $369 million, suggesting an increase from $85 million a year ago.

The Zacks Consensus Estimate for the same from the Asphalt Mix segment (17% of total revenues) is pegged at $218 million, indicating growth from $195 million a year ago.

The consensus mark for the Calcium segment’s net sales is $2.2 million, suggesting a decrease from $2.45 million a year ago.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Vulcan 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: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Release

Martin Marietta Materials, Inc. (MLM - Free Report) reported better-than-expected fourth-quarter 2021 results, wherein earnings and revenues (products and services) beat the respective Zacks Consensus Estimate. Earnings and revenues also increased on a year-over-year basis backed by improved pricing across businesses as well as disciplined cost management.

Martin Marietta remains optimistic regarding its prospects for 2022 and expects total aggregate shipment growth in the range of 7-10% (1-4% organically). Total pricing is expected to grow between 5% and 8% (5-8% organically).

Stocks Worth a Look

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 +9.09% and a Zacks Rank #2.

Shares of Boise Cascade have gained 55.4% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.

Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +1.08% and a Zacks Rank #2.

Shares of Louisiana-Pacific have gained 57.7% over the past year. LPX’s earnings topped the consensus mark in all the last four quarters, with the average being 10.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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