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MARTIN MARIETTA MATERIALS INC (MLM)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered record aggregates profitability and an 8% Adjusted EBITDA increase to $630M; diluted EPS was $5.43 and consolidated gross margin was 30%, with Magnesia Specialties posting record quarterly revenue and second‑quarter profitability .
  • Guidance raised: FY25 Adjusted EBITDA midpoint increased to $2.30B (from $2.25B), capex lifted to $820–$850M, and Magnesia gross profit outlook raised, while consolidated revenue range narrowed slightly; aggregates ASP growth guided higher (6.8–7.8%) .
  • Versus consensus: EPS beat (actual $5.43 vs $5.26*), Adjusted EBITDA beat ($630M vs $623M*), but revenue missed ($1.811B vs $1.881B*); pricing strength and cost discipline drove margin resilience despite weather impacts and softer downstream volumes .
  • Portfolio catalysts: announced exchange of Midlothian cement/North Texas ready‑mix for ~20M tons of aggregates capacity plus $450M cash (closing expected Q1 2026), and acquisition of Premier Magnesia (estimated ~$50M annualized EBITDA contribution once through purchase accounting) .
  • Management flagged double‑digit July volume growth and reiterated price discipline; near‑term strength in infrastructure and heavy nonres (data centers), with residential subdued until affordability improves—key stock reaction catalysts include raised FY EBITDA, pricing momentum, and portfolio mix upgrade toward aggregates .

What Went Well and What Went Wrong

What Went Well

  • Aggregates pricing and profitability: ASP rose 7.4% to $23.21/ton; aggregates gross profit grew 9% to $430M and gross margin expanded 94 bps to 33%, with gross profit/ton up 10% to $8.16—second‑quarter records .
  • Magnesia Specialties momentum: record quarterly revenues ($90M) and second‑quarter records for gross profit ($36M) and gross margin (40%), driven by pricing, improved lime shipments, and efficiency gains .
  • Cost discipline and price/cost spread: management targets a ~340 bps price‑cost spread for FY25 and expects a 14% YoY improvement in gross profit per ton at the midpoint; Q2 Adjusted EBITDA margin reached ~35% .

What Went Wrong

  • Downstream softness: Cement & ready‑mix revenues fell 6% to $245M and gross profit dropped 25% to $54M, with ready‑mix raw material costs higher; Asphalt revenues fell 7% to $228M and gross profit declined 8% to $33M .
  • Weather headwinds and mixed end markets: shipment declines in certain geographies (e.g., Colorado) and wet weather offset strength in the Southeast; residential demand remains subdued pending affordability improvements .
  • Revenue shortfall vs Street: consolidated revenue of $1.811B came in below consensus ($1.881B*), as downstream volumes and higher costs weighed despite aggregates pricing strength .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$1.632 $1.353 $1.811
Diluted EPS ($USD)$4.79 $1.90 $5.43
Gross Profit Margin % (Consolidated)30% 25% 30%
Adjusted EBITDA ($USD Millions)$545 $351 $630
Adjusted EBITDA Margin %33% 26% 35%

Segment/Product Line Breakdown

MetricQ4 2024Q1 2025Q2 2025
Aggregates Revenues ($USD Billions)$1.137 $1.002 $1.320
Aggregates Gross Profit ($USD Millions)$379 $297 $430
Aggregates ASP ($/ton)$21.95 $23.77 $23.21
Aggregates Shipments (MM tons)47.9 39.0 52.7
Aggregates Gross Profit per ton ($/ton)$7.92 $7.60 $8.16
MetricQ4 2024Q1 2025Q2 2025
Cement & Ready‑Mix Revenues ($USD Millions)$261 $233 $245
Cement & Ready‑Mix Gross Profit ($USD Millions)$68 $24 $54
Asphalt & Paving Revenues ($USD Millions)$223 $80 $228
Asphalt & Paving Gross Profit ($USD Millions)$25 $(23) $33
Magnesia Specialties Revenues ($USD Millions)$77 $87 $90
Magnesia Specialties Gross Profit ($USD Millions)$22 $38 $36

Consensus vs Actual (Q2 2025)

MetricConsensusActual
Revenue ($USD Millions)1,880.7*1,811
Adjusted EBITDA ($USD Millions)623.2*630
Diluted EPS ($USD)5.262*5.43

*Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (as of Q1)Current Guidance (Q2)Change
Consolidated Revenues ($USD Millions)FY 2025$6,830–$7,230 $6,820–$7,120 Narrowed/lowered high/low
Net Earnings attributable ($USD Millions)FY 2025$1,005–$1,175 $1,095–$1,185 Raised low/midpoint
Adjusted EBITDA ($USD Millions)FY 2025$2,150–$2,350 $2,250–$2,350 (midpoint $2,300) Raised midpoint
Capital Expenditures ($USD Millions)FY 2025$725–$775 $820–$850 Raised
Estimated Tax RateFY 202520.5%–21.5% 20.0%–21.0% Lowered
Aggregates Volume % GrowthFY 20252.5%–5.5% 1.0%–4.0% Lowered range
Aggregates ASP % GrowthFY 20255.5%–7.5% 6.8%–7.8% Raised
Aggregates Gross Profit ($USD Millions)FY 2025$1,610–$1,710 $1,665–$1,715 Raised
Cement/Ready‑Mix/Asphalt GP ($USD Millions)FY 2025$305–$385 $295–$330 Lowered
Magnesia Specialties GP ($USD Millions)FY 2025$110–$120 $130–$140 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/data centers, energy infrastructureHighlighted major hyperscaler investments; Stargate initiative; pipeline in TX/NC/SC; energy generation to follow Double‑digit July volumes; continued data center acceleration; utilities adding generation; OpenAI’s Abilene expansion noted Strengthening; medium‑term power projects building
Pricing discipline & mid‑yearsPricing cadence shifting toward April; mid‑years primarily in acquired markets; organic ASP up ~7.4% in Q1 Pricing broadly strong; mid‑years tracking as expected; ASP growth guiding high end Sustained high single‑digit ASP growth
Supply chain/rail logisticsStrong relationships with Class I rails; heavy rail movements; long‑haul network Neutral on potential UP–NS merger; rail remains a strength; ballast demand Stable/constructive
Tariffs/macro policyGuidance excluded tariff impacts; domestic supply chain resilience; potential upside to cement and magnesia View tariffs as neutral‑to‑positive in select areas; focus on domestic inputs and reshoring tailwinds Neutral to positive
Residential & light nonresSubdued near‑term; underbuilt Sunbelt markets; builders entitling land Residential still subdued; confidence improving with backlogs; light nonres follows residential recovery Gradual recovery later
Inventory & costsTemporary inventory drawdowns pressured margins in H1; cost buckets improving Weather constrained unit costs; cost control intact; price‑cost widening persists Improving into H2
M&A/portfolio optimization2024 portfolio reshaping; bolt‑ons in FL/CA/TX Quikrete exchange for aggregates + $450M; Premier Magnesia acquired; ~$50M annualized EBITDA from Premier over time Accretive mix shift to aggregates

Management Commentary

  • “We established record quarterly aggregates revenues and second‑quarter records for aggregates profitability, Adjusted EBITDA and Adjusted EBITDA margin… Magnesia Specialties achieved record quarterly revenues… Given our strong first‑half performance… we are increasing our full‑year 2025 Adjusted EBITDA guidance to $2.30 billion at the midpoint.” – Ward Nye, CEO .
  • “We now anticipate a full‑year price‑cost spread of 340 basis points and a 14% year‑over‑year improvement in gross profit per ton at the midpoint… Capex raised to $820–$850 million due to attractive land purchases… net debt to EBITDA 2.4x.” – Michael Petro, CFO .
  • “We entered into a definitive agreement with Quikrete… receiving aggregates operations producing ~20 million tons annually… in exchange for our Midlothian cement plant, related cement terminals and North Texas ready‑mixed concrete assets, plus $450 million cash.” – Company release .

Q&A Highlights

  • July demand strength: management saw double‑digit volume growth across the enterprise in July, supporting confidence in raising annual guidance and volume trajectory .
  • Strategic asset exchange fit: Quikrete assets provide crushed stone tonnage in target geographies (Virginia, Pacific Northwest via Vancouver) aligned with SOAR priorities; tax‑efficient redeployment from cement to core aggregates .
  • Premier Magnesia impact: ~$10M contribution in 2025 (two months net of purchase accounting); implies ~$50M annualized pre‑synergy EBITDA with operational and commercial synergies expected .
  • SG&A modeling: target ~7% of sales on a full‑year basis; cost management aided YoY comps .
  • Capital allocation: $125M 30‑year bond at 7% to be repaid at year‑end; continued M&A pipeline activity and share repurchases prioritized .

Estimates Context

  • Q2 2025 vs consensus: EPS beat ($5.43 vs $5.26*), Adjusted EBITDA beat ($630M vs $623M*), revenue miss ($1.811B vs $1.881B*). Expect analysts to lift FY25 EBITDA and Magnesia estimates and adjust consolidated revenue/segment mix given downstream softness and raised ASP guidance .
  • FY guidance midpoint increased for Adjusted EBITDA ($2.30B), and capex raised, which should drive revisions to free cash flow and capex models; aggregates ASP guidance lifted to 6.8–7.8% and Magnesia GP raised, supporting margin trajectory .

*Values retrieved from S&P Global.

Key Takeaways for Investors

  • Aggregates pricing power intact with unit profitability at record levels; mix shift toward aggregates through the Quikrete exchange should underpin margin resilience through cycles .
  • FY25 Adjusted EBITDA midpoint raised to $2.30B; expect estimate revisions upward for EBITDA and Magnesia, offset by modestly lower consolidated revenue range .
  • Near‑term demand led by infrastructure and heavy nonres (data centers), with July double‑digit volumes and strong ASP momentum; residential remains a call option on affordability .
  • Downstream headwinds (ready‑mix and asphalt) and weather weighed on revenue; watch for H2 normalization as inventory headwinds abate and cost tailwinds persist .
  • Capital allocation remains disciplined: higher FY25 capex for adjacent reserves, continued buybacks, and debt repayment; net leverage at ~2.4x provides flexibility for M&A .
  • Magnesia Specialties differentiates earnings durability; Premier acquisition adds scale with ~$50M annualized EBITDA pre‑synergy once through purchase accounting .
  • Trading implications: focus on pricing sustainability, guidance trajectory, and portfolio upgrade toward aggregates; catalysts include Capital Markets Day (Sept. 3), regulatory progress on surface transportation reauthorization, and Quikrete transaction milestones .