Vulcan Posts Loss, Misses Estimate - Analyst Blog
November 03 2011 - 6:30AM
Zacks
Vulcan Materials Company (VMC) reported
earnings of $22 million or 17 cents per share from
continuing
operations in the third quarter of 2011 compared with $11 million
or 8 cents per share in the prior-year quarter.
The reported
quarter included benefits of $63 million or 30 cents per share, a
part of which related to the sale of non-strategic aggregates
facilities and the remaining from an insurance related to the
Illinois lawsuit settled in the second quarter of last
year.
Excluding these items, Vulcan incurred an
adjusted loss of $41 million or 13 cents per share from continuing
operations, much below the Zacks Consensus Estimate of a profit of
7 cents.
Total revenue increased marginally to $760.8 million from $743.2
million in the year-ago quarter. The year-over-year improvement was
primarily driven by favorable product pricing across all the
segments and stronger demand for public infrastructure projects in
some markets, partly offset by overall weak market conditions.
Segment Details
Net sales from the Aggregates segment increased marginally to
$472.3 million from $469.5 million in the year-ago quarter. Unit
selling price improved 1% year over year on the back of improvement
in many markets.
Unit shipments fell 1.8% to 42.6 million tons, attributable to
overall weak construction activities, partially offset by stronger
demand for public infrastructure projects in California, North
Carolina and Maryland. Segment earnings for aggregates decreased to
$113 million from $125 million in the prior-year
quarter.
Net sales in the Concrete segment decreased 3.4% to $101.4
million from $105.0 million in the previous year due to lower
shipments,
offset by higher average selling prices. Segment loss
narrowed to $9 million from $10 million last year.
The Asphalt Mix segment reported an increase of 11.3% in net
sales to $128.9 million from $115.8 million in the third quarter of
the prior year. The segment was impacted by a 10% rise in asphalt
mix prices along with a 1% growth in shipments. Segment earnings
were $12 million compared with $13 million in the prior-year
quarter.
Net sales in the Cement segment climbed 31.9% to $12.4 million
from $9.4 million in the year-earlier quarter, despite a marginal
rise in shipments and an 8.7% fall in average selling price.
Segment loss in the quarter narrowed to $1 million from $2 million
in the 2010 quarter.
Financial Position
Vulcan Materials’ cash, cash equivalents and restricted cash
improved to $233.4 million as of September 30, 2011 from $83.0
million at the end of the prior-year period. However, long-term
debt rose to $2.82 billion at the end of the third quarter of 2011
from $2.43 billion at the end of the corresponding quarter of
2010.
In the first nine months of the year, the company generated cash
of $121.7 million from operating activities compared with $127.8
million in the year-ago period. Meanwhile, capital expenditures
increased to $77.3 million in the first three quarters from $62.1
million in the year-ago period.
Outlook
Vulcan is optimistic about each of its operating segments
for the upcoming quarters. Almost all the segments are expected to
witness higher volumes and higher prices for its products,
offsetting higher costs.
Further, the company’s selling, general and administrative
expenses in 2011 are projected to be approximately $25 million
lower than the prior-year level. Vulcan Materials anticipates
capital spending of $100 million for the year.
Based in Birmingham, Alabama, Vulcan Materials, a Zacks #3 Rank
(Hold rating) stock, is engaged in the production, distribution and
sale of construction aggregates, and other construction materials
and related services in the U.S. and Mexico.
Vulcan
Materials is the nation’s largest producer of construction
aggregates and a leading producer of other construction materials.
The company’s key competitors include CEMEX, S.A.B. de
C.V. (CX), Lafarge S.A. (LFRGY), Cement
Roadstone Holdings and Martin Marietta Materials
Inc. (MLM).
CEMEX SA ADR (CX): Free Stock Analysis Report
LAFARGE SA-ADR (LFRGY): Free Stock Analysis Report
MARTIN MRT-MATL (MLM): Free Stock Analysis Report
VULCAN MATLS CO (VMC): Free Stock Analysis Report
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