Yahoo Finance Martin Marietta (MLM) to Report Q1 Earnings: What's in the Cards?
Martin Marietta Materials, Inc. MLM is scheduled to report first-quarter 2023 results on May 4, before the opening bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 0.3% and revenues (products and services) missed the same by 3.7%. On a year-over-year basis, the earnings of this aggregates producer decreased 3.5%. Products and services revenues were down 1.9%. Total quarterly revenues (including Product and Services and Freight revenues) were down 1.3% from the year-ago quarter’s figure.
Martin Marietta’s earnings topped the consensus mark in two of the last four quarters and missed on the other two occasions, with the average negative surprise being 9.8%.
Martin Marietta Materials, Inc. Price and EPS Surprise
Martin Marietta Materials, Inc. price-eps-surprise | Martin Marietta Materials, Inc. Quote
The Trend in Estimate Revision
The Zacks Consensus Estimate for Martin Marietta’s first-quarter earnings has decreased to 99 cents from $1.00 per share in the past 60 days. The estimated figure indicates a 153.9% increase on a year-over-year basis. The consensus estimate for products and services revenues is pegged at $1.19 billion, indicating a year-over-year rise of 3.3%.
Factors to Note
Martin Marietta’s quarterly revenues are expected to have witnessed year-over-year growth in the first quarter, given the strong pricing gains in aggregates and strength in public construction. Improved visibility in non-residential construction and contributions from acquisitions are also likely to have been the positives.
The business and earnings of MLM have been sensitive to changes in construction spending, particularly housing and public construction in Texas, Colorado, North Carolina, Georgia, Florida as well as Iowa. Infrastructure construction, particularly for aggregates-intensive highways and roads and streets, might have also contributed to its performance in the quarter, as contractors advanced projects that have been awarded and funded.
However, the slowdown in single-family residential construction and wet weather might have weighed on the quarterly volumes. Higher wet conditions in some regions compared with the year-ago very dry condition must have been reflected in the quarterly results. West Coast states, mainly California, received more rainfall and were cold, while the Southeast witnessed above-average rainfall.
Overall, tough year-over-year comparisons with respect to weather are expected to act as a headwind in the quarter. Notably, in the year-ago period, the weather was dry, contributing to the company’s quarterly performance.
Also, resilient pricing may have been a tailwind. We expect aggregate pricing to increase to $17.93, suggesting 10.9% year-over-year growth. We expect aggregate revenues to increase 7.2% year over year to $735.3 million.
We expect cement revenues to decrease 6.8% year over year to $125.2 million. Cement pricing is also expected to decrease 6.6% to $120.62 per ton.
Also, inflation from hydrocarbon, rising liquid asphalt and diesel fuel costs, more transportation costs and insurance and labor cost may have impacted the bottom line of Martin Marietta and its peers like Vulcan Materials Company VMC. Also, higher repair & maintenance costs, supply and contract costs and supply-chain bottlenecks are added concerns.
We expect the Building Material segment revenues (product and services), which comprise 95% of total revenues, to grow 4.1% year over year to $1,121.1 million.
Our model suggests Magnesia Specialties revenues (product and services) to decline 17.6% year over year to $58.3 million.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Martin Marietta 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Currently, MLM has an Earnings ESP of -14.43% and a Zacks Rank #3.
Recent Notable Release
Vulcan: The construction aggregates company’s focus is on four strategic initiatives — Commercial Excellence, Operational Excellence, Strategic Sourcing and Logistics Innovation — which will enhance the price performance and operating efficiencies.
Vulcan’s prudent cost-control efforts and increased pricing in aggregates are expected to benefit the company. Its focus on a systematic inorganic strategy for expansion is adding to the positives. However, the higher inflationary challenges, soft single-family residential demand and adverse weather are expected to act as headwinds.
The company will report its first-quarter 2023 results on May 4, 2023. The Zacks Consensus Estimate for VMC’s first-quarter earnings indicates a 12.3% decrease on a year-over-year basis. The consensus estimate for revenues is pegged at $1.58 billion, indicating a year-over-year rise of 2.6%.
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 on their respective quarters to be reported.
Trex Company, Inc. TREX has an Earnings ESP of +11.34% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Trex Company have increased 29.2% year to date, outperforming the industry’s 3.3% growth. TREX’s earnings beat the estimates in three of the trailing four quarters and missed once, the average surprise being 7.2%.
Howmet Aerospace Inc. HWM has an Earnings ESP of +0.88% and a Zacks Rank #3.
Shares of HWM have increased 12.4% year to date, outperforming the industry’s 8.4% rise. HWM’s earnings beat estimates in two of the trailing four quarters and met on other two occasions, the average surprise being 3.2%.
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Vulcan Materials Company (VMC) : Free Stock Analysis Report
Martin Marietta Materials, Inc. (MLM) : Free Stock Analysis Report
Trex Company, Inc. (TREX) : Free Stock Analysis Report
Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report
