Vulcan Materials VMCis set to release first-quarter 2018 results on May 3, before the opening bell.
In the last reported quarter, the company delivered a positive earnings surprise of 12.8%. Notably, the company surpassed the Zacks Consensus Estimate in three of the last four quarters, the average earnings beat being 10.
Let’s see how things are shaping up prior to this announcement.
Adverse weather conditions in many markets might mar Vulcan’s results in the to-be-reported quarter, thanks to shipment delays. Vulcan Materials is susceptible to bad weather conditions as most of its products are used outdoors in the public or private construction industry. Also, the company’s production and distribution facilities are located outdoors. Inclement weather affects the company’s ability to produce and distribute products. It also has a negative impact on demand as construction work can be hampered by weather. The first and fourth quarters are most affected by winter. Hurricanes in the Atlantic Ocean and Gulf Coast are prevalent during these periods.
Weak Top-Line Growth
Though adverse weather conditions is expected to mar growth prospects in the quarter, Vulcan’s various bolt-on acquisitions can be expected to provide some cushion to revenues. Moreover, improvement in private construction activities, especially private residential construction, bodes well. As a result, demand for Vulcan Materials’ products is likely to rise, which will drive revenues.
Coming to the segments, Aggregates segment sales (accounting for more than 78% of total revenues) will fall 1. 5% in the quarter, per the Zacks Consensus Estimate. Nevertheless, in the first quarter, revenues are expected to grow 26% year over year in the asphalt segment, per the Zacks Consensus Estimate. Concrete segment revenues are projected to rise 10% in the to-be-reported quarter. Also, Calcium segment revenues are likely to be up 5.8% in the to-be-reported quarter.
For the first quarter, the Zacks Consensus Estimate for revenues is pegged at $798.6 million, up 1.4% year over year.
Earnings to Decline
Increased cost that includes freight distribution costs, rise in the unit cost of diesel fuel and storm-related costs is anticipated to hurt margins. The tepid sales growth along with increased costs is likely to dent earnings. Earnings are estimated at 22 cents, reflecting year-over-year decline of 34.3%.
Vulcan Materials Company Price, Consensus and EPS Surprise