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Cement Up, Aggregates Down for Eagle Materials

Eagle Materials Inc. reported financial results for the third quarter of fiscal 2014, which ended Dec. 31, 2013. Notable items for the quarter in relation to the prior-year’s third quarter include:

  • Sales volumes improved across all business lines, with cement volumes setting a third quarter record of over 1.1 million tons sold.
  • Net sales prices also strengthened across all businesses, with wallboard sales prices increasing 19 percent over the prior year’s third quarter.
  • Quarterly revenue and earnings improvement also reflects the acquisition of assets, primarily two cement plants in Missouri and Oklahoma on Nov. 30, 2012.

Operating earnings from cement for the third quarter were $26.0 million, a 57 percent increase from the same quarter a year ago. The earnings increase resulted from increased sales volumes and average net cement sales prices.

Cement revenues for the quarter, including joint venture and intersegment revenues, totaled $105.6 million, 41 percent greater than the same quarter last year. The revenue improvement reflects a 36 percent increase in our third quarter cement sales volume, including sales volumes attributable to the cement-plant acquisition. Average net cement sales price this quarter was $87.01 per ton, 5 percent higher than the same quarter last year.

The concrete and aggregates segments reported a $3.7 million operating loss for the third quarter. The quarterly loss was impacted by start-up costs associated with a new frac sand business of approximately $2.1 million and the settlement of a litigation matter in California for $0.5 million.

We are very pleased with the progress that we’ve made during the past year integrating our newly acquired cement, concrete and aggregates operations in Kansas City and Tulsa, Okla.,” said Steven R. Rowley, the company’s president and CEO. “We’re also extremely pleased with our wallboard and paperboard businesses as they both continue to operate at very high levels of operational efficiency, and our sales opportunities continue to increase as the demand for wallboard increases during the construction recovery.” He also noted the strong demand from the energy sector for oil well cement and the continued improvement in demand this winter, despite the difficult weather conditions.

Eagle Materials has announced cement price increases for 2014. “Our $8 per ton price increase is holding in the early implementation markets. In the majority of the markets, our price increases are scheduled to be implemented on April 1,” Rowley said.