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    Vulcan Materials Co (VMC)

    Q3 2024 Earnings Summary

    Reported on Feb 7, 2025 (Before Market Open)
    Pre-Earnings Price$259.55Last close (Oct 29, 2024)
    Post-Earnings Price$270.00Open (Oct 30, 2024)
    Price Change
    $10.45(+4.03%)
    MetricYoY ChangeReason

    Total Revenue

    -8% YoY

    Lower shipments in aggregates due to weather disruptions and the divestiture of certain concrete operations drove overall revenues down, partially offset by ongoing pricing improvements.

    Asphalt Segment Revenue

    +10% YoY

    Pricing gains of around 4-5% and stable to slightly higher asphalt shipments led to year-over-year growth, while lower liquid asphalt costs also supported segment margins.

    Concrete Segment Revenue

    -52% YoY

    The divestiture of Texas operations in late 2023 significantly reduced revenue contribution, compounded by weaker residential construction demand in certain regions.

    Gulf Coast Region Revenue

    -18% YoY

    Wet weather in Texas and the loss of concrete volume from the Texas divestiture curtailed revenues; despite this, strong pricing in the aggregates segment helped mitigate deeper declines.

    Operating Income (EBIT)

    -20% YoY

    Lower concrete volumes and fewer gains on asset sales compared to the prior period reduced operating income, while partial offsets included improvements in asphalt product margins and cost controls.

    Net Income

    -25% YoY

    Reduced EBIT and slightly higher one-time charges (like divestiture costs) brought net income down; pricing improvements were not sufficient to offset the volume and profit headwinds.

    Diluted EPS

    -24% YoY

    EPS mirrored the drop in net income; although the share count remained basically stable, fewer non-recurring gains compared to last year and the concrete volume losses weighed on overall earnings per share.

    MetricPeriodPrevious GuidanceCurrent GuidanceChange

    Volume guidance

    FY 2024

    -4% to -7%

    -4% to -7%

    no change

    Capital expenditures

    FY 2024

    $625M to $675M

    $625M to $650M

    lowered

    Pricing outlook

    FY 2025

    no prior guidance

    high single-digit increases

    no prior guidance

    TopicPrevious MentionsCurrent PeriodTrend

    Strong pricing momentum and price increases

    Consistent 10–12% increases previously, with midyear lifts setting a strong foundation.

    Executing midyear 2024 hikes, projecting high single-digit 2025 growth. Pricing remains robust across regions.

    Stable: Continues as a key profit driver

    Double-digit cash gross profit growth

    Consistently above 10%, supporting margin expansion in prior calls.

    Eighth consecutive quarter of double-digit YOY profit per ton; margins expanded.

    Ongoing: Remains strong under cost discipline

    Volume trends

    Previously impacted by rain delays and soft demand; optimism expressed for 2025 across periods.

    Weather caused a 10% decline in Q3 2024 volumes, but low single-digit 2025 growth expected.

    Gradual recovery anticipated next year

    Cost inflation

    Initially high, then shifted from mid- to high-single digits; now decelerating.

    Pressures are moderating, assisting margin expansion.

    Shift from high to moderating

    Public infrastructure spending

    Steady highway growth and robust state budgets consistently highlighted as key demand drivers.

    IIJA and record state funding expected to sustain multi-year public project demand.

    Consistently critical for growth

    Weakness in private non-residential

    Warehouses viewed as the biggest drag, partially offset by manufacturing and data centers.

    Warehouse construction remains soft, offset by data centers and manufacturing.

    Persisting but partially offset by other sectors

    Residential construction sentiment

    Single-family has been rebounding while multifamily lags.

    Single-family shows improvement, but multifamily still under pressure.

    Mixed with single-family momentum

    Strategic M&A and bolt-on acquisitions

    Multiple smaller acquisitions in Alabama/Texas in prior quarters; pipeline remains active.

    Remains a focus, with $206M YTD in bolt-on deals including Wake Stone.

    Continual but scaled

    The Vulcan Way of Selling

    Cited frequently in margin improvements and pricing consistency.

    Emphasized for disciplined pricing, driving double-digit profit gains.

    Essential for margin expansion

    Deferred projects & 2025 volumes

    Weather delays and soft private demand partially shifting work to 2025; not heavily noted in Q1/Q4 calls.

    Some 2024 volume deferred to 2025; low single-digit growth expected.

    Emerging as a next-year boost

    1. 2025 Pricing Outlook
      Q: How will pricing look for next year?
      A: Management expects a high single-digit percentage increase in pricing for 2025 , driven by midyear price increases and strong backlogs providing good visibility and momentum into next year.

    2. Volume Outlook for 2025
      Q: How much could volumes be up in 2025?
      A: They anticipate low single-digit volume growth in 2025 , with some push from 2024 due to weather delays and growth in residential and public construction offsetting ongoing challenges in certain sectors.

    3. Cost Expectations and Gross Profit per Ton
      Q: How will costs per ton trend into Q4 and 2025?
      A: Costs are expected to start moderating over the next few quarters , with operating efficiencies improving and cost pressures easing, supporting continued double-digit margin growth.

    4. Operating Conditions Impact on Price and Costs
      Q: How did weather impact volumes and margins, and what is expected in Q4?
      A: Volumes were down 10% in Q3, largely due to inclement weather , but despite this, they achieved double-digit cash gross profit per ton growth, demonstrating the business's durability. For Q4, volumes will depend on weather; underlying demand is down mid-single digits, and they expect to finish within their guidance of minus 4% to 7% for the year.

    5. Public Infrastructure Demand
      Q: Can you still see an acceleration in public infrastructure volumes next year?
      A: Yes, they see public demand growth supported by federal and state funds flowing into highways, with six of their largest states at record funding levels, supporting demand over the next several years.

    6. Private Sector Demand and Projects on Hold
      Q: How does private sector demand look with potential hesitancy due to the election and rates?
      A: There is pent-up demand with projects on hold , and they hope that post-election and easing interest rates will prompt these projects to commence, impacting volumes in the second half of 2025 and beyond.

    7. Cash Gross Profit per Ton Target
      Q: How should we think about your prior target of $11–$12 cash gross profit per ton?
      A: Having reached this target faster than expected, they are now "basing down that $11" and plan to set new goals soon.

    8. Wake Stone Acquisition
      Q: Can you provide details on the Wake Stone acquisition?
      A: The acquisition is expected to close later this year. Wake Stone operates in a high-growth region and historically produces 8 to 9 million tons annually.

    9. Plant Technology Improvements and Cost Impact
      Q: Where are you on the plant technology journey and expected efficiencies?
      A: Currently, 25%–30% of operations are fully implemented, yielding double-digit throughput improvements. Completion is aimed for early 2026, which will positively impact costs.

    10. Capital Allocation
      Q: What's the plan for capital allocation, including M&A and debt repayment?
      A: The M&A pipeline remains active with opportunities like Wake Stone. The balance sheet is positioned to fund growth and address notes due in April next year.

    11. Competitive Pricing Dynamics
      Q: What are you seeing in pricing competition from private players?
      A: Companies understand the value of their assets and the need for returns. They believe pricing in aggregates will remain strong, supported by growing demand.

    12. Free Cash Flow Expectations and CapEx
      Q: How should we think about free cash flow and CapEx for 2025?
      A: Detailed guidance will be provided in February. Historically, CapEx has been 8%–9% of revenues , which is reasonable for modeling purposes.