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Martin Marietta Materials Touts Stability With First Quarter Results

Martin Marietta Materials reported its net sales increased to $306.2 million compared with $295.6 million a year ago. Loss per diluted share was $0.39 compared with loss per diluted share of $0.54 a year ago. The company noted that increased diesel costs negatively affected earnings by $0.05 per diluted share. Heritage aggregates product line pricing was up 0.4 percent, although volume was down 1.2 percent.

“Stability in our aggregates shipments will likely lead to sustainable price increases,” said Ward Nye, president and CEO of Martin Marietta Materials. “However, such increases may not be uniform throughout our enterprise. Overall, we expect full-year 2011 aggregates pricing will range from flat to a 2 percent increase. Additionally, rising energy costs may provide an impetus for certain mid-year price increases.

“Our first-quarter financial results confirmed our expectations, reflecting a 240-basis-point improvement in our consolidated operating margin (excluding freight and delivery revenues) over the prior-year quarter,” Nye said. “I am especially pleased our aggregates business experienced greater levels of stability during the quarter. In particular, aggregates product line pricing, supported partly by 2010 volume growth, increased for the first time in more than a year. We believe this pattern of stability will continue and serve as a platform as we advance toward the next phase of the construction cycle – recovery and growth.

“Since heavy-construction activity slows during the winter months, our first-quarter results seldom reflect annual performance,” Nye said. “That said, milder weather in some of our markets early in the quarter led to monthly aggregates shipment growth over the prior-year periods. In contrast to 2010, weather patterns deteriorated in the critical last two weeks of March, slowing momentum gained early in the quarter. We believe these weather-related delays in shipments were a primary factor leading to an overall quarterly decrease of 1 percent in our heritage aggregates volume. However, despite a volume decrease for the quarter and the negative impact of rising diesel prices, we achieved an incremental operating margin (excluding freight and delivery revenues) for our aggregates business, in line with our expectations.

“Infrastructure as our largest end-use market, comprises approximately half of our quarterly aggregates shipments,” Nye said. “Uncertainty stemming from the absence of a long-term federal highway bill has negatively affected the infrastructure construction market. For the quarter, infrastructure shipments declined 3 percent compared with the prior-year quarter.”