Martin Marietta Materials, Inc. MLM a report is planned third quarter of 2022 results November 2, before opening.
In the most recent reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 6.5%, while revenue (products and services) beat the same by 2.9%. Compared to the same period last year, the profit of this producer of aggregates increased by 3.9%. Revenue from products and services grew by 17.6%. Total quarterly revenue (including product and service and freight revenue) increased by 19.1% compared to the year-ago quarter.
Martin Marietta’s earnings beat the consensus mark in two of the past four quarters and missed the other two, with an average downside surprise of 8%.
Estimate revision trend
The Zacks Consensus Estimate for Martin Marietta’s Q3 earnings is $4.74 per share, indicating an increase of 11.5% from the $4.25 reported last quarter. The consensus estimate for net sales is $1.67 billion, which represents an increase of 14.2% compared to the reported quarter in the prior year.
Martin Marietta Materials, Inc. Price and earnings per share surprise
Martin Marietta Materials, Inc. price epi surprise | Quote from Martin Marietta Materials, Inc
Factors to consider
Martin Marietta’s quarterly revenue and profits are expected to rise year-over-year in the third quarter, driven by strong aggregate price growth and strength in public construction. Improved visibility in residential and non-residential construction and acquisition contributions were also likely positives.
Material-intensive infrastructure construction, particularly highways, roads and streets, may have also contributed to its performance in the quarter as contractors delivered projects that were awarded and funded. Also, sustainable pricing could be a tailwind.
However, inflation due to hydrocarbons, rising prices for liquid asphalt and diesel fuel, increased transportation costs, insurance and labor costs could have affected the result of Martin Marietta and his peers such as Vulcan Materials Company VMC. In addition, higher repair and maintenance costs, supply and contract costs, and supply chain bottlenecks pose additional challenges.
MLM business and profits are sensitive to changes in construction costs, especially housing and public construction in Texas, Colorado, North Carolina, Georgia, Florida, and Iowa. Delays in federal spending could depress revenues.
Other forecasts
The Zacks Consensus Estimate for the Building Materials (Products and Services) segment, which accounts for 95% of total revenue, is $1,603 million, representing 8.4% year-over-year growth.
The consensus estimate for Magnesia Specialties revenue (products and services) is currently $71 million, representing a year-over-year decline of 1.4% from the $72 million reported a year ago.
What the Zacks model reveals
Our tested model does not provide a definitive prediction of Martin Marietta’s earnings increase this time. A combination of positive Profit ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of higher returns, which is not the case here. You can find the best stocks to buy or sell before they are announced in our ESP income filter.
MLM currently has a Zacks Rank #3 (Hold) and an Earnings ESP of -1.99%. You see a complete list of today’s Zacks #1 Rank stocks here.
About VMC
Volcano: The building materials company’s focus on four strategic initiatives—commercial excellence, operational excellence, strategic sourcing and logistics innovation—will drive cost performance and operational efficiency. Vulcan posted higher profits despite modest revenues thanks to smart efforts to control costs and higher prices for aggregates. Its focus on a systematic inorganic expansion strategy adds upside.
VMC is likely to meet expectations when it reports third-quarter 2022 results on Nov. 2 before the opening bell. It carries a Zacks Rank #3 and has an Earnings ESP of -3.07%.
Promotions with a profitable combination
Here are two companies in the Zacks Construction a sector that, according to our model, has the right combination of elements to beat earnings in the respective quarters to be reported.
Based in Winchester, Virginia, Trex, Inc. TREX — which makes and distributes decking, railings, outdoor furniture and accessories — beat earnings estimates for each of the past four quarters, with an average surprise of 10.8%.
TREX is poised to beat expectations when it reports third-quarter 2022 results after the market closes on Oct. 31. It currently has a Zacks Rank #3 and an Earnings ESP of +25.62%.
Continued investment by customers in improving outdoor living likely contributed to the company’s quarterly performance. Favorable pricing/mix and focus on cost reduction and production efficiency efforts add positives.
Headquartered in Dothan, Alabama, Construction Partners, Inc. THE ROAD is a civil infrastructure company. Organic and inorganic growth opportunities in the attractive Southeastern US road construction/repair market are expected to drive the company’s growth. It has missed earnings estimates in three of the past four quarters and met once, with an average negative surprise of 75.6%.
ROAD is poised to beat expectations when it reports results for the fourth quarter of fiscal 2022. It currently has a Zacks Rank #3 and an Earnings ESP of +8.00%.
Strong demand for infrastructure services in end markets in both private and public sectors, consistent business model execution and growth strategy focused on operational performance and efficient project execution are likely to have contributed to the company’s quarterly performance.
Stay tuned for future earnings announcements with help Zacks Earnings Calendar.
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