Factors setting the tone for Vulcan Materials (VMC) third quarter results – November 1, 2021
Vulcan Materials Company (MVC – Free Report) is expected to release third quarter 2021 results on November 4, ahead of the opening bell.
In the last published quarter, the company’s adjusted earnings and revenue exceeded Zacks’ consensus estimate by 6% and 0.7%, respectively. Year over year, profits were down 1.9%, but revenues were up 2.9%.
Vulcan Materials earnings have broken the consensus mark in two of the past four quarters and have missed the same the other two times, with an average surprise of 16.5%.
Trend in revised estimates
Zacks’ consensus estimate for earnings per share for the quarter to report has been revised down to $ 1.65 per share, from $ 1.70 in the past 30 days. Nevertheless, this indicates an increase of 5.8% compared to the quarter of the previous year. The consensus estimate for revenue is set at $ 1.46 billion, which suggests 11.3% year-over-year growth.
Factors to note
Strong momentum in residential and non-residential construction activities should have benefited the performance of Vulcan Materials in the third quarter. In addition, resilient pricing, given the growth of all product lines, should have supported growth.
In addition, the higher expenses of a number of states it serves likely contributed to the revenue. The aggregates business (including crushed stone, sand and gravel as well as other aggregates) contributed significantly to the sales growth. In addition, efforts to improve operational excellence, acquisition synergies and cost control measures should have helped results to some extent. Vulcan Materials has completed the previously announced acquisition of US Concrete, further strengthening its aggregates business with additional geographic reach. US Concrete is now a 100% subsidiary of Vulcan. This buyout should have helped its turnover, while weighing on margins.
Lower shipments due to weather conditions and rising diesel fuel costs may have posed risks. Like other aggregates and cement producers, Vulcan Materials is expected to have experienced weather-related issues in the third quarter, primarily in Texas and Arizona. Therefore, the wet weather conditions may have been a headwind. In addition, inflation due to hydrocarbons, rising costs of liquid asphalt, insurance and labor may have added to the negatives.
Zacks’ consensus estimate for aggregates segment net sales (accounting for 81% of total revenue) is set at $ 1,140 million, indicating an increase from $ 1,049 million a year ago .
The consensus mark for Concrete segment net sales (accounting for 8% of total revenue) is $ 144 million, which suggests an increase from $ 103 million a year ago.
Zacks’ consensus estimate for the same of the Asphalt Mix segment (17% of total revenue) is set at $ 249 million, indicating growth from $ 235 million a year ago.
The consensus mark for Net Sales in the Calcium segment is $ 1.1 million, which suggests a decline from $ 1.35 million a year ago.
What our quantitative model predicts
Our proven model does not conclusively predict an increase in profits for Vulcan this time around. This is because a stock must have both a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy), or 3 (hold) rank for this to happen. Unfortunately, that is not the case here, as you will see below.
ESP on earnings: The PSE of earnings, which is the difference between the most accurate estimate and the Zacks consensus estimate, is -0.63%. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.
Zack Rank: The company currently holds a Zacks Rank # 3.
You can see The full list of today’s Zacks # 1 Rank stocks here.
Actions worth seeing
Here are a few companies in the Zacks Construction sector, which our model shows have the right mix of elements to show a beaten profit in their respective quarters to report.
Jacobs Engineering Group Inc. (J – Free Report) has an Income ESP of + 6.49% and a Zacks # 2 rank.
Fluor Corporation (FLR – Free Report) has an ESP on earnings of + 12.50% and carries the Zacks # 3 rank.
Thor Industries, Inc. (THO – Free Report) has an ESP of + 3.13% earnings and sports a Zacks # 1 rank.