Martin Marietta Materials Inc. reported record results for the fourth quarter and full year ended Dec. 31, 2017. Fourth quarter consolidated total revenues were $970.5 million, versus $948.8 million in 2016. Full-year 2017 consolidated total revenues were $3,965.6 billion, versus $3,818.7 billion in 2016.
Fourth-quarter total revenues for the Building Materials business, which includes the aggregates, cement, ready mixed concrete and asphalt and paving product lines, were $903.0 million, up 2.1 percent from $884.7 million. Average selling prices improved across all product lines and segments during the quarter.
Aggregates product line fourth-quarter pricing improved 4.0 percent despite lower shipment volumes. The Mid-America Group and the Southeast Group generated aggregates product line pricing growth of 6.9 percent and 4.2 percent, respectively, for the fourth quarter, driven by continued price discipline.
Product mix and ongoing competitive pressures led to relatively flat aggregates pricing for the West Group. The cement product line generated pricing growth of 4.1 percent for the quarter, reflecting strong ongoing construction activity in the Dallas/Fort Worth area. Ready mixed concrete and asphalt pricing increased 2.1 percent and 16.3 percent, respectively. Unseasonably warm weather in Colorado and strong demand allowed for favorable asphalt pricing during the quarter.
Overall, fourth-quarter aggregates product line shipments decreased slightly, driven by government uncertainty, labor constraints and ongoing project delays, particularly in the Mid-America and West groups.
The Southeast Group reported aggregates volume growth of 5.6 percent, driven by strong nonresidential construction and improving public construction activity. Total cement shipments increased 1.7 percent. Ready mixed concrete shipments decreased 4.7 percent overall with lower energy-sector shipments offsetting strong demand in the Dallas/Fort Worth and Denver markets. Asphalt shipments increased 1.2 percent for the fourth quarter.
Aggregates product line shipments to the infrastructure market increased slightly over the prior-year fourth quarter. Continued underinvestment in the nation’s infrastructure, coupled with marginal construction activity from the FAST Act and ongoing project delays, limited the growth in overall infrastructure shipments. However, the West Group and Southeast Group, which include states with robust DOT budgets, reported growth in infrastructure shipments. Overall, aggregates product line shipments to the infrastructure market comprised 38 percent of fourth-quarter aggregates product line volumes, well below the Company’s most recent five-year average of 43 percent.
Aggregates product line shipments to the nonresidential market decreased 7 percent during the fourth quarter. While the Southeast Group reported strong industrial construction growth, the West Group, consistent with management’s expectations, reported a double-digit decline in nonresidential shipments due to the completion of several large energy-related projects in 2016 that were not immediately replaced in 2017. Management expects the next wave of these projects to bid in 2018. The nonresidential market represented 31 percent of fourth-quarter aggregates product line shipments.
Aggregates product line shipments to the residential market increased 9 percent during the fourth quarter, driven by continued strength in housing across the Company’s geographic footprint, particularly in the western and southeastern United States. Notably, Texas, Florida, North Carolina, Georgia, South Carolina and Colorado, key geographies for the Building Materials business, comprised six of the top 10 states for growth in single-family housing unit starts for the 12 months ended December 2017. The residential market accounted for 24 percent of fourth-quarter aggregates product line shipments.
Aggregates product line volumes for the ChemRock/Rail market declined 10 percent versus the prior-year quarter, driven by reduced agricultural lime shipments. The ChemRock/Rail market accounted for the remaining 7 percent of fourth-quarter aggregates product line shipments.
Ward Nye, chairman, president and CEO of Martin Marietta, stated, “By nearly all meaningful measures, 2017 was an extraordinary year for Martin Marietta. Among our accomplishments are two significant milestones – the best safety performance in our history and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) exceeding $1.0 billion. We also delivered record revenues, profitability and earnings per diluted share for both the fourth quarter and full year, building on the momentum created by record performance in prior years.
“Even more noteworthy, we achieved these safety and financial results despite externally-driven volume headwinds prevalent throughout much of the year that reduced full-year aggregates volumes by one million tons compared with 2016 and almost nine million tons as measured against our initial 2017 guidance. Our ability to post record results despite these external factors, among them extraordinary weather events, contractor labor constraints, and a slower-than-expected pace of public contract lettings, validates the successful execution of our strategic plan and underpins our optimism for a steady and extended cyclical recovery as we begin 2018.”