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Vulcan Materials (VMC) to Post Q3 Earnings: What to Expect
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Vulcan Materials Company (VMC - Free Report) is scheduled to release third-quarter 2022 results on Nov 2, before the opening bell.
In the last-reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate by 7.8% but revenues beat the same by 5.4%. On a year-over-year basis, earnings dropped 2.5% but revenues increased 43.6%.
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 2.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised downward to $1.71 from $1.76 over the past 30 days. The estimated figure indicates an increase of 11% from the year-ago quarter. The consensus estimate for revenues is pegged at $2 billion, suggesting 31.8% year-over-year growth.
The slowing residential market, wet weather in Texas, rail freight bottlenecks and cement shortages are expected to reflect in third-quarter aggregates volumes of the companies like Vulcan, Martin Marietta Materials, Inc. (MLM - Free Report) and Summit Materials, Inc. (SUM - Free Report) .
Nonetheless, higher non-residential construction activities and incremental federal funding from the recently enacted Infrastructure Investment and Jobs Act should have acted as a tailwind for third-quarter 2022. Also, resilient pricing — given the growth in all product lines — is expected to have supported growth for Vulcan.
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.
Yet, higher repair & maintenance costs and supply & contract costs may have been risks. Inflation from hydrocarbons, rising liquid asphalt costs, insurance and labor might have added to the negatives. Along with higher energy prices, VMC's Mexican operations shutdown is added negative.
Other Projections
The Zacks Consensus Estimate for net sales from the Aggregates segment (accounting for 72% of total revenues) is pegged at $1,371 million, indicating an increase from $1,172 million a year ago.
The consensus mark for net sales from the Concrete segment (accounting for 13.8% of total revenues) is $470 million, suggesting a significant increase from $219 million a year ago.
The Zacks Consensus Estimate for net sales from the Asphalt Mix segment (14% of total revenues) is pegged at $270 million, indicating growth from $221 million a year ago.
The consensus mark for the Calcium segment’s net sales is $1.60 million, suggesting an increase from $1.47 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 -3.07%. 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.
Here is one company in the Zacks Construction sector, which according to our model, has the right combination of elements to post an earnings beat on its respective quarter to be reported.
Trex Company, Inc. (TREX - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #3.
TREX’s earnings topped the consensus mark in all the last four quarters, with the average being 10.8%. Earnings for the to-be-reported quarter are expected to decline 76.6% year over year.
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Vulcan Materials (VMC) to Post Q3 Earnings: What to Expect
Vulcan Materials Company (VMC - Free Report) is scheduled to release third-quarter 2022 results on Nov 2, before the opening bell.
In the last-reported quarter, the company’s adjusted earnings missed the Zacks Consensus Estimate by 7.8% but revenues beat the same by 5.4%. On a year-over-year basis, earnings dropped 2.5% but revenues increased 43.6%.
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 2.3%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share has been revised downward to $1.71 from $1.76 over the past 30 days. The estimated figure indicates an increase of 11% from the year-ago quarter. The consensus estimate for revenues is pegged at $2 billion, suggesting 31.8% year-over-year growth.
Vulcan Materials Company Price and EPS Surprise
Vulcan Materials Company price-eps-surprise | Vulcan Materials Company Quote
Factors to Note
The slowing residential market, wet weather in Texas, rail freight bottlenecks and cement shortages are expected to reflect in third-quarter aggregates volumes of the companies like Vulcan, Martin Marietta Materials, Inc. (MLM - Free Report) and Summit Materials, Inc. (SUM - Free Report) .
Nonetheless, higher non-residential construction activities and incremental federal funding from the recently enacted Infrastructure Investment and Jobs Act should have acted as a tailwind for third-quarter 2022. Also, resilient pricing — given the growth in all product lines — is expected to have supported growth for Vulcan.
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.
Yet, higher repair & maintenance costs and supply & contract costs may have been risks. Inflation from hydrocarbons, rising liquid asphalt costs, insurance and labor might have added to the negatives. Along with higher energy prices, VMC's Mexican operations shutdown is added negative.
Other Projections
The Zacks Consensus Estimate for net sales from the Aggregates segment (accounting for 72% of total revenues) is pegged at $1,371 million, indicating an increase from $1,172 million a year ago.
The consensus mark for net sales from the Concrete segment (accounting for 13.8% of total revenues) is $470 million, suggesting a significant increase from $219 million a year ago.
The Zacks Consensus Estimate for net sales from the Asphalt Mix segment (14% of total revenues) is pegged at $270 million, indicating growth from $221 million a year ago.
The consensus mark for the Calcium segment’s net sales is $1.60 million, suggesting an increase from $1.47 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 -3.07%. 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.
Stock With Favorable Combination
Here is one company in the Zacks Construction sector, which according to our model, has the right combination of elements to post an earnings beat on its respective quarter to be reported.
Trex Company, Inc. (TREX - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #3.
TREX’s earnings topped the consensus mark in all the last four quarters, with the average being 10.8%. Earnings for the to-be-reported quarter are expected to decline 76.6% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.