August 4, 2015 – While parts of the West are suffering from historic drought conditions, other parts of the country experienced massive rainfall earlier this year. So much so, that the rainy conditions were mentioned in both the Vulcan Materials and Martin Marietta second-quarter reports. Ward Nye, chairman, president and CEO of Martin Marietta, said, "According to the National Oceanic and Atmospheric Administration (NOAA), the United States experienced the second wettest second quarter in more than a century. The NOAA further indicated that Texas reported its wettest second quarter and first six months of the year for the 121 years this data has been tracked. These highly unusual factors resulted in nearly $100 million in deferred net sales across all product lines which lowered gross profit by an estimated $27 million. Additionally, precipitation reduced production and operating leverage, which negatively affected gross profit by an estimated additional $8 million to $13 million. Tom Hill, president and chief executive officer of Vulcan Materials, said, "The continuing recovery in construction activity across most of our markets was masked by extremely wet weather, particularly in April and May. Despite deferred shipments and operating cost challenges due to these weather conditions, our local teams delivered another quarter of significant margin improvements – a pattern of performance sustained since the gradual recovery in shipments began eight quarters ago.
Rain, Rain, Go Away
- Written by Mark Kuhar