Martin Marietta Materials Q2: Revenue Miss, Lower Aggregates Shipments & More

Martin Marietta Materials, Inc. MLM reported second-quarter FY23 revenue growth of 10.9% year-over-year to $1.82 billion, missing the consensus of $1.83 billion.

EPS was $5.60, compared to $5.65 a year ago, beating the consensus of $4.85.

Gross profit was $560.4 million (+31.8% Y/Y), and the margin expanded by 488 bps to 30.8%. The operating margin was 25.4%, down by 371 bps from 2Q22.

Adjusted EBITDA improved 24.6% Y/Y to $596.1 million, margin expanded by 360 bps to 32.7%.

MLM's operating cash flow year-to-date was $518.5 million compared with $286.2 million for the prior-year period.

The company held $421.5 million of unrestricted cash and equivalents on hand and $1.20 billion of unused borrowing capacity on its existing credit facilities as of June 30, 2023.

The company returned $232.5 million to shareholders through dividend payments and share repurchases for the six months ended June 30, 2023.

Building Materials business revenue was $1.74 billion (+11.6% Y/Y), and the corresponding gross profit was $536.1 million (+34.3% Y/Y).

Aggregates shipments decreased 5.7% while pricing increased 18.6%, or 17.0% on a mix-adjusted basis.

"As record-setting public funds for infrastructure and manufacturing begin to enter the U.S. economy, we continue to expect that aggregates demand will accelerate in the second half of 2023. This well-chronicled increased investment should largely offset the current residential construction air pocket, which we expect to bottom in the third quarter of 2023," commented Ward Nye, Chairman and CEO.

FY23 Guidance: Martin Marietta Materials now expects FY23 total revenues of $6.725 billion-$6.86 billion (prior $6.60 billion-$6.815 billion) vs. consensus $6.82 billion and adjusted EBITDA of $2 billion-$2.1 billion (prior $1.8 billion-$1.9 billion).

The company expects average selling price growth of 17%-19% for Aggregates. 

Price Action: MLM shares are trading lower by 2.24% at $448.14 on the last check Thursday.