Vulcan Materials Shares Gain After Q2 Results

  • Vulcan Materials Co VMC reported a second-quarter revenue increase of 43.6% year-over-year to $1.95 billion, beating the consensus of $1.86 billion.
  • Adjusted EPS was $1.53, missing the consensus of $1.74.
  • Overall gross margin contracted by 644 bps to 22.8%. The operating earnings increased by 7% Y/Y to $307.6 million, and the margin contracted by 538 bps to 15.7%.
  • Vulcan Materials generated cash from operating activities year-to-date of $325.5 million, compared to $397.9 million a year ago.
  • Adjusted EBITDA was $450.2 million (+10.9% Y/Y), and the margin contracted by 680 bps to 23%.
  • Average selling prices increased in each product line, helping to offset inflationary pressures. Aggregates pricing increased 9% (10 percent mix-adjusted), and the average price for asphalt and concrete increased 19% and 14%, respectively, during the quarter.
  • On June 30, 2022, the total debt ratio to trailing-twelve months Adjusted EBITDA was 2.6 times.
  • The company disclosed a potential EBITDA impact of $80 million - $100 million should it be unable to fully operate in Mexico for the balance of 2022. In May, the company unexpectedly and arbitrarily shut down its operations in Mexico.
  • FY22 Outlook: Vulcan Materials expects an Adjusted EBITDA of $1.60 billion - $1.70 billion.
  • "We are updating our full-year Adjusted EBITDA guidance range to reflect the considerable pricing momentum in our aggregates business as well as higher than expected energy-related cost inflation that is currently impacting each of our segments," said Chairman & CEO Tom Hill.
  • Price Action: VMC shares are trading higher by 2.92% at $171.11 on the last check Thursday.
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