Vulcan to Report Q2 Earnings: What's in the Offing?

Vulcan Materials Company VMC is scheduled to release second-quarter 2024 results on Aug 6, before the opening bell.

In the last reported quarter, the company's adjusted earnings per share and revenues surpassed the Zacks Consensus Estimate by 5.3% and 1.2%, respectively. On a year-over-year basis, total revenues and EPS grew 15.8% and 6.2%, respectively.

Notably, Vulcan's earnings topped the consensus mark in the last four quarters, the average surprise being 8.7%.

Trend in Estimate Revision

The Zacks Consensus Estimate for second-quarter EPS has decreased to $2.49 from $2.60 over the past 30 days. The estimated figure indicates an 8.7% increase from the year-ago EPS of $2.29. However, the consensus mark for revenues is pegged at $2.04 billion, suggesting a 3.6% year-over-year decline.

Factors to Influence Q2

Vulcan's second-quarter revenues are anticipated to have experienced a year-over-year decrease, primarily due to reduced volumes caused by adverse weather conditions and less traction on cement price increases. Additionally, the quarter's concrete sales are anticipated to be lower following the sale of the Texas concrete business. The main challenges that affected aggregates volumes during this period were wet spring and decelerating single-family construction activity, along with the ongoing deep contraction, in the multi-family segment.

Nonetheless, quarterly performance is expected to have witnessed strong pricing gains across its product lines and strength in public construction. Higher non-residential construction activities and incremental federal funding from the Infrastructure Investment and Jobs Act are expected to have acted as a tailwind for VMC.

The Aggregates business, including crushed stone, sand and gravel and other aggregates (which accounted for 75.9% of total 2023 revenues), has been a major contributor to the top-line growth. Our model suggests that net sales from the Aggregates segment will grow 6.5% to $1.68 billion from a year ago. We also predict Aggregates volumes to decline 1.9% but Aggregates price is likely to grow 10.5% in the quarter.

Our model suggests net sales from the Asphalt Mix segment (which accounted for 15.2% of total revenues in 2023) to be $360.6 million, indicating 6.9% growth from a year ago.

We also anticipate revenues from the Concrete segment (which accounted for 16.1% of total revenues in 2023) to decline 44.6% to $190.1 million from a year ago. We also predict Concrete volumes to decline 50.7% year over year and Concrete prices to grow 12.1% year over year.

We also predict volumes for the Asphalt Mix unit are likely to grow 1.7% year over year and price to increase 2.8% year over year.

Meanwhile, higher material expenses, the shortage of skilled laborers and rising wage costs are expected to have impacted VMC's second-quarter margins.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for VMC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Currently, VMC has an Earnings ESP of -2.18% and a Zacks Rank #3.

Peer Release

Martin Marietta Materials, Inc. MLM has an Earnings ESP of -3.87% and a Zacks Rank #3.

MLM's earnings for the to-be-reported quarter are expected to increase 3% on 1.3% higher revenues when it reports second-quarter 2024 results on Aug 8. The company reported better-than-expected earnings in all the last four quarters, the average surprise being 12.6%.

Stocks With Favorable Combination

Here are some other companies in the Zacks Construction sector, which, according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Dycom Industries DY has an Earnings ESP of +4.43% and a Zacks Rank #3.

DY's earnings for the to-be-reported quarter are expected to increase 7.4%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 30.2%.

Aspen Aerogels, Inc. ASPN has an Earnings ESP of +9.38% and carries a Zacks Rank #3.

ASPN's earnings topped the consensus mark in all the last four quarters, with the average being 68.2%. Earnings for the to-be-reported quarter are expected to grow 122.7% year over year.

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