Firing on All Cylinders: Vulcan Materials (NYSE:VMC) Q4 Earnings Lead the Way
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Vulcan Materials (NYSE:VMC) and the rest of the building materials stocks fared in Q4.
Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.
The 9 building materials stocks we track reported a strong Q4. As a group, revenues beat analysts’ consensus estimates by 2% while next quarter’s revenue guidance was 1.3% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 16.4% since the latest earnings results.
Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.
Vulcan Materials reported revenues of $1.85 billion, up 1.1% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ EBITDA estimates.
Tom Hill, Vulcan Materials’ Chairman and Chief Executive Officer, said, “Our aggregates-led business delivered a strong finish to the year. Adjusted EBITDA in the fourth quarter improved 16 percent, and Adjusted EBITDA margin expanded 370 basis points. The favorable pricing environment coupled with strong operational execution led to consistent double-digit year-over-year improvement in aggregates cash gross profit per ton each quarter – exiting 2024 with aggregates cash gross profit per ton at $11.50. As we look to 2025, the pricing environment remains favorable, and we are focused on our operating disciplines to manage costs and improve efficiencies. By controlling what we can control, we expect to deliver 19 percent growth in Adjusted EBITDA.”
Vulcan Materials Total Revenue
The stock is down 14.9% since reporting and currently trades at $229.96.
Started as a two-man shop dating back to the 1860s, Armstrong (NYSE:AWI) provides ceiling and wall products to commercial and residential spaces.
Armstrong World reported revenues of $367.7 million, up 17.7% year on year, outperforming analysts’ expectations by 4.4%. The business had a very strong quarter with an impressive beat of analysts’ organic revenue estimates and full-year revenue guidance exceeding analysts’ expectations.
Armstrong World Total Revenue
Armstrong World scored the highest full-year guidance raise among its peers.The stock is down 13.5% since reporting. It currently trades at $126.10.
Originally founded as Carlisle Tire and Rubber Company, Carlisle Companies (NYSE:CSL) is a multi-industry product manufacturer focusing on construction materials and weatherproofing technologies.
Carlisle reported revenues of $1.12 billion, flat year on year, falling short of analysts’ expectations by 1.9%. It was a slower quarter as it posted a miss of analysts’ EBITDA and organic revenue estimates.
Carlisle delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 16.7% since the results and currently trades at $313.11.
The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.
Tecnoglass reported revenues of $239.6 million, up 23.1% year on year. This result was in line with analysts’ expectations. Taking a step back, it was a mixed quarter as it also logged a narrow beat of analysts’ adjusted operating income estimates.
Tecnoglass delivered the fastest revenue growth among its peers. The stock is down 12.5% since reporting and currently trades at $61.14.
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ:UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
UFP Industries reported revenues of $1.46 billion, down 4.1% year on year. This print topped analysts’ expectations by 2.7%. More broadly, it was a satisfactory quarter as it also produced an impressive beat of analysts’ sales volume estimates but a significant miss of analysts’ adjusted operating income estimates.
UFP Industries had the slowest revenue growth among its peers. The stock is down 12.1% since reporting and currently trades at $102.18.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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