Vulcan Materials Co. announced third-quarter total revenues of $1.419 billion, up from $1.240 billion in 2018; and year-to-date total revenues of $3.743 billion, up from $3.295 billion in 2018. Net earnings were $216 million, up 20%, and Adjusted EBITDA was $407 million, up 15%, compared to last year’s third quarter.
The strong earnings growth was driven principally by an 18% increase in Aggregates segment gross profit. Aggregates shipments increased 8% year-over-year, and freight adjusted pricing increased 5.6% (5.0% on a mix-adjusted basis). Adjusting for the extra shipping day in this year’s third quarter, same-store shipments grew by 6%. Same-store aggregates gross profit incremental flow-through rate for the trailing 12 months was 60%, consistent with long-term expectations.
Tom Hill, chairman and chief executive officer, said, “We continued to execute well during the third quarter. The growth in our aggregates shipments and improvement in pricing were strong. Importantly, our industry-leading aggregates unit profitability increased 9%. We remain focused on creating long-term value by compounding unit margins through our four strategic initiatives – commercial excellence, operational excellence, strategic sourcing and logistics innovation, which enhance price growth and operating efficiencies.
“Through the first nine months, aggregates shipments have exceeded the upper end of our expectations, pricing has increased in line with our expectations, and we have delivered good incremental earnings.,” Hill said. “As we consider our outlook for the full year, we expect to finish the year with aggregates profitability better than originally expected. We expect non-aggregates gross profit to be lower than original expectations but in line with 2018 results, offsetting higher aggregates earnings. For the full year, we are reaffirming our outlook for double-digit earnings growth.”
Third-quarter Aggregates segment sales increased 15%, and gross profit increased 18% to $357 million. Unit margins increased $0.46 per ton, or 9%, to $5.87 per ton. These improvements resulted from growth in shipments, price improvements and execution of operating disciplines and efficiencies.
A healthy demand environment, led by transportation-related construction, was the principal driver of volume growth and price improvement. Third-quarter aggregates shipments increased 8% as compared to the prior year quarter.
Most markets reported solid shipment growth, including double-digit growth in certain markets in the Mid-Atlantic, Southeast and Texas. All of the company’s key markets reported year-over-year price growth.
For the quarter, freight-adjusted average sales price increased 5.6% versus the prior year’s quarter. Mix-adjusted average sales price increased 5.0%. Positive trends in backlogged project work, along with demand visibility and customer confidence, support our expectations for continued price improvement throughout the remainder of 2019.
Third quarter same-store unit cost of sales (freight-adjusted) increased 3% as compared to the prior year quarter. Trailing 12-month, same-store incremental gross profit flow-through rate was 60%, in-line with long-term expectations. Quarterly gross profit flow-through rates can vary widely from quarter to quarter; therefore, the Company evaluates this metric on a trailing 12-month basis.