Martin Marietta Reports Double-Digit Increases
- Published: Tuesday, 12 November 2013 11:26
Martin Marietta Materials Inc. announced its results for the third quarter and nine months ended Sept. 30, 2013. Ward Nye, president and CEO of Martin Marietta Materials, stated: “We are pleased to report a double-digit increase in both revenues and earnings in the third quarter of 2013. Our performance was driven largely by the ongoing recovery in private-sector construction activity as well as solid execution of our long-term strategic plans and diligent management of our cost structure. I am especially proud of the fact that our company achieved these strong results despite the continued public-sector construction headwinds. The combination of a 12 percent increase in consolidated net sales over the prior-year quarter and our ongoing focus on controlling costs resulted in a 13 percent increase in earnings per diluted share. These results reflect new third-quarter records for both net sales and earnings from operations in the Specialty Products business as well as volume and pricing growth in the aggregates product line.”
The company’s aggregates business experienced volume and pricing increases from all reportable segments and pricing growth in all product lines. An 8.1 percent increase in aggregates product line shipments led to increased operating leverage, as illustrated by a 220-basis-point improvement in the aggregates business’ operating margin (excluding freight and delivery revenues). The specialty products business benefitted from strong dolomitic lime sales, including the capacity expansion from the recently completed kiln in Ohio, which led to a 13 percent increase in the segment’s net sales.
“We are encouraged by significant improvements in our markets and believe, as do most third-party forecasters, that significant upside potential remains in both the residential and nonresidential construction segments. Additionally, our aggregates business will benefit from the current boom in shale gas production, as well as planned follow-on development. We are confident that these trends bode especially well for our business,” Nye said.
Nye continued, “Each of the Aggregates business’ reportable segments posted aggregates product line volume growth, led by an 8.1 percent increase in the Mid-America Group. Consistent with trends noted earlier in the year, private-sector construction generated this growth. The nonresidential market, which comprised 30 percent of third-quarter aggregates shipments, increased 19 percent and growth was notable in both commercial construction and the energy sector. The residential market achieved volume growth of 15 percent and accounted for 13 percent of our quarterly shipments. Housing permits and starts, key indicators for residential construction activity, continue to have strong year-over-year improvement, which should help sustain the recovery in this market. The ChemRock/Rail market, 11 percent of aggregates volumes, reported higher ballast shipments and increased 13 percent over the prior-year quarter.
“Shipments to the infrastructure end-use market, which represented the remaining 46 percent of our aggregates product line business, were essentially flat with the prior-year quarter. Federal budget and deficit disputes and the uncertainty over future highway funding levels beyond the September 2014 expiration of the Moving Ahead for Progress in the 21st Century Act, or MAP-21, have contributed to the reluctance of many states and municipalities to commit to large-scale projects. Additionally, while awards under the Transportation Infrastructure Finance and Innovation Act (TIFIA) component of MAP-21 have the ability to leverage up to $50 billion in financing for transportation projects of either national or regional significance, they continue to move at a slower pace versus earlier expectations with only two projects being awarded. While we still expect TIFIA to benefit several of our major markets – namely Texas, North Carolina and Florida – we do not expect any meaningful impact before the second half of 2014, and more notably in 2015,” Nye said.