Martin Marietta’s Second Quarter

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July 28, 2020 – Martin Marietta reported a decrease in aggregates shipments in the second quarter, although company gross profit hit record amounts. But what about the company’s other segments? Second-quarter cement shipments decreased 2.7%, driven by reduced demand for West Texas oil-well specialty cement products caused by historically low oil prices. While cement pricing increased attractively in North Texas, Houston, and portions of Central Texas, notably lower sales of higher-priced oil-well specialty cement products limited overall pricing growth to 0.1%. Cement product gross margin expanded 210 basis points to 39.7% driven by improved kiln reliability and lower fuel costs. Ready-mixed concrete shipments increased 8.7%, excluding second-quarter 2019 shipments from the Southwest Ready Mix Division’s business in the Arkansas, Louisiana and eastern Texas (ArkLaTex) areas that was divested in January 2020. Pricing improved modestly, with increased shipments and pricing contributing to the 270-basis-point product gross margin improvement. Colorado asphalt shipments increased 34.6% versus an extremely weather-challenged prior-year quarter. Asphalt pricing declined 1.4% due to unfavorable product mix from a higher percentage of shipments to lower-priced municipal projects. Products and services gross profit of $21.9 million was a second-quarter record.

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