Vulcan Materials Co. (VMC) reported a wider loss of $44.5 million or 35 cents per share in the first quarter of 2010 compared to $32 million or 29 cents per share in the same quarter of 2009. The loss was close to the Zacks Consensus Estimate of a loss of 37 cents per share. Total revenue in the quarter fell 18% to $493 million.
The wider loss and shrunken revenues were attributable to a 14% decline in Aggregates shipments (reducing earnings by 18 cents per share) on the back of a weak demand in private construction and an inclement weather. Further, a 48% increase in energy costs reduced earnings by 3 cents per share.
Revenues in the Aggregates segment shrank 15% to $309 million due to lower shipments. Concrete segment revenues dipped 28% to $83 million due to lower selling prices and volumes.
Revenues in the Asphalt Mix segment declined 20% to $63 million due to lower selling prices. Earnings in the segment reduced due to a 27% rise in the unit cost of liquid asphalt and lower sales volumes. Cement segment revenues fell 7% to $9 million due to lower selling prices. However, earnings in the segment improved due to lower production costs and a 4% increase in sales volumes.
Vulcan had cash and cash equivalents of $36 million as of Mar 31, 2010. Long-term debt amounted to $2.4 billion as on that date. The long-term debt to capitalization ratio stood at 37%.
In the quarter, Vulcan had a net cash flow of $6 million from operating activities, down from $105 million in the year-ago period. Meanwhile, capital expenditures reduced to $19 million from $23 million a year ago. For full year 2010, the company expects an increase in capital spending to $125 million from $110 million in 2009.
In the remaining three quarters of 2010, Vulcan expects Aggregates shipments to rise 4% – 10% from the prior year. Consequently, the company expects Aggregates sales volumes for full year 2010 to rise up to 5% from 2009 on a same-store basis. For the year, it expects Aggregates pricing to rise up to 2% from the previous year.
In the Concrete segment, Vulcan expects flat sales volumes compared to the prior year while pricing is to decline modestly, reflecting continued weakness in private nonresidential construction.
In the Asphalt segment, Vulcan expects sales volumes in the remaining nine months of the year to increase on a year-over-year basis, offsetting the 9% decline in the first quarter. As a result, Asphalt volumes and prices in 2010 are expected to be flat compared to the prior year. In the Cement segment, the company expects earnings to improve slightly from the prior year.
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