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Martin Marietta (MLM) Down 4.2% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Martin Marietta Materials, Inc. (MLM - Free Report) . Shares have lost about 4.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is MLM due for a breakout? 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.
Fourth-Quarter 2017 Earnings Results
Martin Marietta posted impressive fourth-quarter 2017 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of $1.88 surpassed the Zacks Consensus Estimate of $1.42 by 32.4%. Earnings also improved 21.3% from the prior-year quarter.
Consolidated revenues of $970.5 million rose 2.3% year over year. Freight and delivery revenues totaled $59.2 million, down 1% year over year.
Segment Discussion
The Building Materials business includes aggregates, cement, ready mixed concrete, asphalt and paving product lines.
The segment’s total revenues were up 2.1% to $903 million. Aggregates total revenues grew 2.4% to $565.2 million. Ready Mixed Concrete total revenues fell nearly 2.3% to $231.9 million. Cement revenues rose 6.5% to $93.6 million. Asphalt and paving product lines revenues improved 9.6% to $77.7 million.
Shipments (volume) in the aggregates product line declined 0.9% due to lower shipments, thanks to government uncertainty, labor constraints and ongoing project delays, particularly in the Mid-America and West Groups.
Geographically, West Groups’ aggregate volumes dropped 1.5%. The Southeast Group reported a 5.6% increase in volumes on strong nonresidential construction and higher public construction activity.
The Magnesia Specialties segment — which includes magnesium oxide, magnesium hydroxide and dolomite lime products — reported total revenues of $67.5 million, up 5.3% year over year.
Margins
Consolidated gross margin increased 290 basis points (bps) to 26.8% owing to the ongoing pricing improvements and benefits from the strategic deployment of capital.
Financials
Martin Marietta ended the quarter with cash and cash equivalents of $1,446.4 million, as of Dec 31, 2017, compared with $50 million as on Dec 31, 2016.
As of Dec 31, 2017, 62.9 million shares of the company’s common stock were outstanding and 14.7 million shares remain under the current repurchase authorization.
2018 Guidance
Total revenues are expected in the band of $4.2-$4.4 billion.
Gross profit is projected in the range of $1.04-$1.14 million.
Aggregates Product line total revenues are projected in the range of $2.5-$2.6 billion. Aggregates product line volume is expected in the range of 4-6%.
Cement Product Line total revenues are estimated in the band of $415-$445 million.
Ready Mixed Concrete and Asphalt/Paving Product Lines total revenues are projected in the band of $1.37-$1.45 billion.
Magnesia Specialties Business net sales are expected between $265 million and $270 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
Martin Marietta Materials, Inc. Price and Consensus
At this time, MLM has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. The stock was also allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, MLM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Martin Marietta (MLM) Down 4.2% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Martin Marietta Materials, Inc. (MLM - Free Report) . Shares have lost about 4.2% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is MLM due for a breakout? 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.
Fourth-Quarter 2017 Earnings Results
Martin Marietta posted impressive fourth-quarter 2017 results, with earnings and revenues beating the Zacks Consensus Estimate.
Adjusted earnings per share of $1.88 surpassed the Zacks Consensus Estimate of $1.42 by 32.4%. Earnings also improved 21.3% from the prior-year quarter.
Consolidated revenues of $970.5 million rose 2.3% year over year. Freight and delivery revenues totaled $59.2 million, down 1% year over year.
Segment Discussion
The Building Materials business includes aggregates, cement, ready mixed concrete, asphalt and paving product lines.
The segment’s total revenues were up 2.1% to $903 million. Aggregates total revenues grew 2.4% to $565.2 million. Ready Mixed Concrete total revenues fell nearly 2.3% to $231.9 million. Cement revenues rose 6.5% to $93.6 million. Asphalt and paving product lines revenues improved 9.6% to $77.7 million.
Shipments (volume) in the aggregates product line declined 0.9% due to lower shipments, thanks to government uncertainty, labor constraints and ongoing project delays, particularly in the Mid-America and West Groups.
Geographically, West Groups’ aggregate volumes dropped 1.5%. The Southeast Group reported a 5.6% increase in volumes on strong nonresidential construction and higher public construction activity.
The Magnesia Specialties segment — which includes magnesium oxide, magnesium hydroxide and dolomite lime products — reported total revenues of $67.5 million, up 5.3% year over year.
Margins
Consolidated gross margin increased 290 basis points (bps) to 26.8% owing to the ongoing pricing improvements and benefits from the strategic deployment of capital.
Financials
Martin Marietta ended the quarter with cash and cash equivalents of $1,446.4 million, as of Dec 31, 2017, compared with $50 million as on Dec 31, 2016.
As of Dec 31, 2017, 62.9 million shares of the company’s common stock were outstanding and 14.7 million shares remain under the current repurchase authorization.
2018 Guidance
Total revenues are expected in the band of $4.2-$4.4 billion.
Gross profit is projected in the range of $1.04-$1.14 million.
Aggregates Product line total revenues are projected in the range of $2.5-$2.6 billion. Aggregates product line volume is expected in the range of 4-6%.
Cement Product Line total revenues are estimated in the band of $415-$445 million.
Ready Mixed Concrete and Asphalt/Paving Product Lines total revenues are projected in the band of $1.37-$1.45 billion.
Magnesia Specialties Business net sales are expected between $265 million and $270 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
Martin Marietta Materials, Inc. Price and Consensus
Martin Marietta Materials, Inc. Price and Consensus | Martin Marietta Materials, Inc. Quote
VGM Scores
At this time, MLM has an average Growth Score of C, though it is lagging a bit on the momentum front with a D. The stock was also allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Interestingly, MLM has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.