Building Blocks of Success: Martin Marietta Materials Beats On Earnings, Eyes Recovery Despite Housing Wobble

Martin Marietta Materials Inc MLM shares are trading higher after it reported fourth-quarter FY23 results.

Revenue grew 8.9% Y/Y to $1.608 billion, missing the consensus of $1.632 billion.

EPS from continuing operations was $4.63, compared to $3.01 a year ago, beating the consensus of $3.99.

Gross profit was $483.5 million (+36.5% Y/Y), and the margin expanded to 30.1% from 24.0% a year ago. 

Building Materials business revenue was $1.53 billion (+8.9% Y/Y), and the corresponding gross profit was $461.3 million (+39.2% Y/Y).

Aggregates shipments decreased by 2.1%, while pricing increased by 15.0%, or 14.3%, on a mix-adjusted basis.

Adjusted EBITDA improved 28.3% Y/Y to $502.6 million in the quarter.

Martin Marietta Materials’ operating cash flow was $1.53 billion compared with $991.2 million for the prior year.

The company held $1.27 billion of unrestricted cash and cash equivalents and $1.20 billion of unused borrowing capacity on its existing credit facilities as of December 31, 2023.

The company returned $324.0 million to shareholders through dividend payments and share repurchases in the year.

Ward Nye, Chair and CEO said, “Looking at the year ahead, we expect aggregates demand for infrastructure, large-scale energy and domestic manufacturing projects will be strong, largely offsetting weaker residential demand and anticipated softening in light nonresidential activity. That said, as mortgage rates stabilize and affordability headwinds recede, we fully expect single-family residential construction to recover, as demand still far exceeds supply particularly in our key markets.”

Also Read: Martin Marietta Materials Divests Materials Assets In Texas For $2.1B Cash

FY24 Guidance: Martin Marietta Materials expects total revenues of $6.745 billion-$7.185 billion vs. consensus $7.355 billion and adjusted EBITDA of $2.14 billion-$2.34 billion.

The company expects average selling price growth of 10%-12% for Aggregates in the year. 

This week, Martin Marietta Materials disclosed a deal to acquire 20 active operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia from affiliates of Blue Water Industries LLC (BWI Southeast) for $2.05 billion in cash. 

Price Action: MLM shares are trading higher by 1.61% at $535.72 on the last check Wednesday.