Vulcan Materials Co. announced results for the quarter ended June 30, reporting total second-quarter revenues of $1,361.0 million versus $1,322.6 million in the second quarter of 2020. Year-to-date revenues were $2,429.4 million versus $2,371.8 million for the same period in 2020.
The company reported net earnings of $195 million, or $1.46 per diluted share. Aggregates gross profit increased $23 million, or 6%, to $374 million. Non-aggregates gross profit declined $21 million to $25 million.
The previously announced U.S. Concrete acquisition is expected to close in the second half of 2021.
In its Aggregates segment, second quarter sales increased 5%, and gross profit increased 6% to $374 million. Gross profit margin increased 40 basis points due to growth in both volume and price as well as effective cost control that helped to offset an estimated $14 million impact of rising diesel prices. Earnings improvement was widespread across the company’s footprint.
Aggregates shipments increased 4% from the prior year’s second quarter, reflecting improving demand across all end-market segments. The pricing environment continues to be positive across the company’s footprint as demand visibility improves. For the quarter, freight-adjusted pricing increased 3% (mix-adjusted pricing increased 2.6%). The rate of growth improved sequentially throughout the quarter, reflecting pricing actions taken in many areas. These efforts are expected to help offset cost inflation forecasted for the rest of the year.
Improved operating efficiencies helped offset both the sharp increase in the average unit cost of diesel fuel and the impact of any operational disruptions caused by the wet weather. Freight adjusted unit cost of sales were 3.5% higher than the prior year’s second quarter but increased less than 1% excluding the impact of higher diesel prices.
Overall, non-aggregates (Asphalt, Concrete and Calcium) segments gross profit was $21 million lower than the prior year’s second quarter. Asphalt segment gross profit was $14 million in the quarter compared to $30 million in the prior year period.
The decrease in earnings was primarily driven by the impact of higher liquid asphalt costs (approximately $10 million) and wet weather conditions that delayed project shipments. Asphalt volumes declined 8% as volume growth in California and Tennessee was more than offset by lower volumes in Alabama, Arizona and Texas. The average price for liquid asphalt increased 19% versus the prior year’s second quarter, outpacing the 1% increase in the average selling price.
Second quarter Concrete segment gross profit was $10 million compared to $14 million in the prior year. Shipments decreased 7% versus the prior year due to the timing of projects in Virginia, while average selling prices increased 3% compared to the prior year.
Calcium segment gross profit of $0.7 million was in line with the prior year quarter.
Tom Hill, chairman and chief executive officer, said, “Our performance in the first half of 2021 has been supported by consistent execution on Vulcan’s four strategic disciplines. Our team’s efforts have allowed us to expand our aggregates gross profit margin by 150 basis points and increase our cash gross profit per ton by 5%. Despite energy inflation and disruptive weather in the second quarter, aggregates gross profit margin improved 40 basis points, and cash gross profit grew by 2% to $7.83 per ton. Across our business, energy inflation reduced earnings by $25 million in the quarter, $15 million due to diesel and $10 million due to liquid asphalt. Lower non-aggregates earnings dampened an otherwise strong performance.”
Hill continued, “We expect to carry forward the progress we have made through the first half of 2021 and will continue to diligently navigate the changing macro environment. Recent pricing actions across much of our footprint and a keen focus on improving operating efficiencies will continue to help offset spikes in certain input costs. The flexibility of our operating plans will enable us to maintain a high level of performance during the second half of the year and achieve our full-year 2021 targets. We remain excited and focused on closing the proposed acquisition of U.S. Concrete, which will expand Vulcan’s footprint in attractive geographies and accelerate our growth strategy.”