Vulcan Materials Co. announced results for the first quarter ending March 31, 2014. The company is reporting that net sales increased $44 million, or 9 percent. Gross profit increased $16 million, or 93 percent.
Aggregates segment gross profit improved $14 million, or 55 percent. Shipments increased 6 percent, or 1.8 million tons. Pricing increased 2 percent. Cash gross profit per ton improved 8 percent.
Non-aggregates gross profit improved approximately $3 million. Earnings from continuing operations were $0.41 per diluted share.
Don James, chairman and chief executive officer, said, “Our aggregates business reported solid growth in the first quarter despite extremely cold weather in most of our markets, and we remain confident in the full-year expectations we announced in early February. We continue to experience strengthening demand in each of our end markets and across most of our footprint. Our operations and sales teams continue to deliver strong incremental margins. On a 6 percent increase in aggregates volume, our teams delivered a 55 percent increase in aggregates gross profit – despite the production and shipping challenges that come with a cold, wet winter. Aggregates pricing continues to benefit from improving demand, and we are realizing price improvements across virtually all of our markets.
“Although construction activity and aggregates consumption remain far below historical levels, our aggregates shipments have now increased year-over-year for four consecutive quarters,” James continued. “With the strength of our aggregates reserves positions, our continuing profit enhancements, the divestitures of non-strategic operations, and significant debt reduction, Vulcan remains very well positioned to grow earnings faster than sales during this period of aggregates demand recovery."
Regarding the company’s 2014 outlook, James stated, “Vulcan-served markets are expected to outperform other markets, led by continued improvement in private construction activity. Leading indicators such as housing starts, nonresidential contract awards and employment continue to show favorable growth trends in Vulcan-served markets. Additionally, we continue to pursue a number of large-scale transportation and industrial projects, which we are well positioned to supply. While timing can be difficult to forecast, we expect these projects to play a meaningful role in our full year volumes in 2014. Additionally, we expect any shipment delays due to severe winter weather in the first quarter to be recovered during the remainder of the year.
“Trailing 12-month aggregates shipments have increased for four consecutive quarters and we expect this volume growth to provide positive momentum for broad-based price growth. This top-line growth in aggregates coupled with tight management of our production costs should result in further margin expansion in aggregates.”