Q1 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$39.10Last close (May 2, 2024)
Post-Earnings Price$39.67Open (May 3, 2024)
Price Change
$0.57(+1.46%)
- Strong operational improvements and cost management are driving margin expansion in the Aggregates segment, with cash gross profit margins increasing to over 50% and progressing toward their 60% target. The company is focused on maintaining flat cost per ton despite inflation through continuous improvement projects and operational excellence initiatives.
- Successful price increases in the Cement business, with potential for further upside not fully included in guidance, are contributing to revenue and margin growth. The company implemented a $15 per ton price increase in January in legacy markets, with over 70% realization in northern markets, and has initiated additional $4 to $6 per ton price increases in April, with further increases planned for June and July. The cement markets are largely supply-constrained, supporting these pricing actions.
- Strong demand from public infrastructure projects is expected to drive growth, with over $28 billion in IIJA funding flowing into the company's top 8 states since fiscal 2022, and contract highway and paving awards running at 21%, which is 11 percentage points above the national average. The company's backlogs are strong, particularly in Texas and Colorado, supporting a mid-single-digit-plus growth outlook for public end markets.
- Cost inflation remains elevated and is not moderating as quickly as expected, which could pressure margins throughout the year. The company expects inflation to moderate but admits it may happen more in the back half of the year.
- The company is cautious about increasing the upper end of its full-year guidance due to potential integration risks from recent acquisitions, cost inflation not moderating as expected, and variability in private end markets. This caution suggests uncertainties that could impact future performance.
- Demand in private end markets, particularly residential and nonresidential sectors, is variable and may remain flat to down. The company notes that these sectors are sensitive to interest rates and that any recovery is not currently factored into their guidance, which could affect future growth if conditions do not improve.