Don James Looks Ahead
- Written by Mark Kuhar
May 5, 2011 – Vulcan Materials released its first quarter 2011 financial report, and in dissecting it, it is interesting to read what the company's president, Don James, identifies as the factors that will influence demand for the company's products in 2011. He specifically cites 1) the need for modest growth in residential construction; 2) the stabilization of private nonresidential construction and 3) the continuity of federal funding for highways at current levels. "We expect the full year growth in volumes to be weighted more towards the second half of the year driven primarily by growth in demand," he said. "Certain large projects in a number of key markets are expected to drive aggregates volume growth in the second half of the year. The mid-point of our estimated range in aggregates shipments continues to be 2 percent above the prior year's level. Additionally, recent weather-related disruptions from tornadoes and flooding are likely to affect second quarter aggregates shipments in a number of southeastern and Mississippi River markets and push some demand to later in the year. We believe a more stable demand outlook will benefit pricing and we expect most of our markets to achieve year-over-year price growth in 2011. As a result, we continue to expect aggregates pricing in 2011 to increase 1 to 3 percent from the prior year's level. The earnings effect of the increase in aggregates pricing will be somewhat offset by the energy-related cost pressures expected throughout the remainder of the year. With that said, we expect aggregates earnings in 2011 to increase from the prior year due to higher shipments, increased average selling prices and the benefits of production efficiencies and cost management measures."