Eagle Materials is reporting record revenue of $601.5 million, up 7%, and record net earnings of $120.8 million, up 15%. Revenue in the Heavy Materials sector, which includes Cement, Concrete and Aggregates, Joint Venture and intersegment Cement revenue, was $396 million, a 15% improvement.
Heavy Materials operating earnings increased 19% to $81 million primarily because of higher Cement sales prices and sales volume partially offset by increased maintenance costs and the effects of an extended maintenance outage at our Joint Venture.
Cement revenue, including Joint Venture and intersegment revenue, was up 16% to $329 million. Operating earnings increased 19% to $74 million reflecting higher Cement sales prices and sales volume partially offset by increased maintenance costs and the impact from the step-up in inventory values related to the Stockton Terminal Acquisition.
Profitability at its Joint Venture was negatively affected by an extended outage during the quarter to address ongoing equipment issues at this facility over the past year. The extended outage resulted in increased maintenance costs and reduced production. Equipment reliability has improved in July, but additional work will need to be completed during our planned maintenance outage in fiscal 2025, which will again increase the outage timeline at the joint venture facility.
The average net Cement sales price for the quarter increased 15% to $147.27 per ton. Cement sales volume for the quarter increased 1% to 2.0 million tons. Sales volume in the quarter was affected by wet weather in the western part of the United States.
Concrete and Aggregates revenue was up 9% to $67 million, reflecting increased Concrete and Aggregates prices and higher aggregates sales volume. First quarter operating earnings increased 23% to $7 million.
The increase reflects higher Concrete and Aggregates net sales prices and approximately $1.2 million of additional costs incurred in the first quarter of fiscal 2023 from the step-up in inventory values related to the acquisition of an aggregates business in northern Colorado
Commenting on the first quarter results, Michael Haack, president and CEO, said, “Fiscal 2024 is off to a solid start for Eagle, with record revenue of $602 million, adjusted EPS of $3.55, and gross margins of 29.3%, an increase of 240 bps. Our portfolio of businesses continued to perform well, and we made progress on our strategic priorities. During the quarter, we reached an important milestone in the production of Portland Limestone Cement, surpassing 50% across our system. We completed the acquisition of a cement import terminal in northern California that further strengthens our competitive position in that market. And we returned $83 million of cash to shareholders through share repurchases and dividends, all while maintaining our balance sheet strength: at June 30, 2023, Eagle’s net debt was $1.1 billion, and our net adjusted leverage ratio (net debt to Adjusted EBITDA) remained at 1.4x, giving us substantial financial flexibility for continued disciplined capital allocation.”
Haack continued, “Looking ahead to the balance of the year, we expect demand for cement to remain steady driven by infrastructure and heavy industrial projects. Residential construction activity remains resilient as the market balances interest rate-related affordability challenges with chronic supply shortages and strong demand. Given Eagle’s balance sheet strength, the favorable geographic positioning of our operations, and our consistent operational and strategic execution, we are poised for a strong fiscal 2024.”