Vulcan Materials (VMC) Q1 Earnings: What's In The Cards?
Zacks Investment Research | May 09, 2017 08:58AM ET
Vulcan Materials Company (NYSE:VMC) is set to release first-quarter 2017 financial numbers before the opening bell on May 10.
In the last reported quarter, the company had posted a negative 16.87% earnings surprise. Notably, the company surpassed the Zacks Consensus Estimate in only one of the last four quarters which more than offset the three earnings miss. This resulted in an average earnings beat of 73.94%.
Let’s see how things are shaping up prior to this announcement.
Factors at Play
Tough comps accompanied with spending delays with respect to large projects are likely to be the headwinds in the to-be-reported quarter for Vulcan, the largest producer of construction aggregates in the U.S. Solid first quarter of 2016 shipments make comparisons difficult for the to-be-reported quarter. In fact, the company is witnessing continued volume weakness in California, Illinois, and coastal Texas businesses.
However, following the soft first quarter, the company expects these headwinds to subside and improvements to accelerate in the back half of the year.
Again, sustained growth in private construction activity improves the demand for both the aggregates as well as non-aggregates businesses of Vulcan. With a warmer winter this year, the company is expected to witness higher aggregate sales. Further, the prospects for higher funding levels and easy regulatory environment may prove beneficial for the company with respect to idled projects.
Along with this, the company’s aggressive cost-control initiatives, strong aggregate reserve position, pricing power, divestiture of non-strategic operations and significant debt reduction are likely to contribute in the first quarter.
For the first quarter, the Zacks Consensus Estimate for earnings is pegged at 22 cents per share, reflecting a decrease of 16.4% year over year, while the consensus for revenues is $756.4 million, implying a marginal 0.2% year-over-year growth.
Earnings Whispers
Our proven model does not conclusively show that Vulcan is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Zacks Investment Research
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