Martin Marietta first-quarter sales up 66%

Martin Marietta first-quarter sales up 66%
Published: 05 May 2015

Martin Marietta reported consolidated first quarter net sales of US$631.9m compared with US$379.7m a year earlier, an increase of 66 per cent.

Aggregates product line volume increase of 17.1 per cent, aggregates product line price increase of 11.4 per cent. Heritage aggregates product line volume increase of seven per cent, excluding shipments from 2014 divestitures from prior-year quarter. Reported heritage volume increased 3.7 per cent. Heritage aggregates product line price increase of 10.5 per cent.

The cement business is benefitting from continued strength in Texas markets, where demand exceeds local supply. For the quarter, the business generated US$96.6m of net sales and US$19 of gross margin. It incurred US$5.4m in planned cement kiln maintenance costs, which are expected to be heaviest in the third and fourth quarters. First-quarter operating results were negatively affected by wet weather in Texas, which delayed some shipments to the balance of the year. During the first quarter, the company announced price increases of $10 per ton in the Texas and California markets effective 1 April.

Ward Nye, Chairman, President and CEO of Martin Marietta, stated: "Notably, we achieved volume growth and reported a double-digit pricing increase in our heritage aggregates product line despite severe late winter weather in many markets and significant rainfall in Texas. We view this volume and pricing momentum as an indication of a more construction-centric phase of economic recovery. Our first-quarter results and outlook for the full year have led us to increase our annual aggregates product line pricing guidance from an increase of 4-6 per cent to an increase of 7-9 per cent over 2014.

On the outlook, Nye stated: "We continue to see indicators of further recovery in the eastern half of the United States, where Martin Marietta has leading market positions. North Carolina, Georgia and Florida all rank in the top five in job growth and, similar to Texas, construction activity is improving. Further, both North Carolina and Georgia are among several states considering legislation to expand infrastructure funding, supporting the importance of transportation investment in spurring economic growth. Additionally, Iowa enacted a $0.10 per gallon increase in the state gas tax on March 1, 2015, to increase annual funding for infrastructure projects by an estimated US$215m.