Construction aggregates and materials manufacturer Vulcan Materials Co. (VMC) reported Monday an 8% year-over-year decline in profit for the third quarter, hurt by drop in quarterly revenues due to weak demand amid the slump in the construction industry, despite effective cost management. Earnings per share from continuing operations dropped 29.6%, but topped analysts' expectations by a penny. The company noted that cost management and continued focus on improving margins would help position the company for significant participation in U.S. economic recovery.
The economic stimulus plan was to fund transportation and other infrastructure-related projects that in turn would have benefited the construction industry, hard hit by above-average unemployment and weak demand. Vulcan noted that the economic stimulus funds of $27 billion designated for highway projects are working their way into the U.S. economy. While 73% of these funds had been obligated to specific projects by the end of September, only $2.4 billion of these stimulus funds had been paid to contractors for construction work performed.
In a statement, chairman and chief executive officer, Don James said, "Our employees continue to run the business in a cost-efficient manner. Although sales volumes in the third quarter were 19 to 29 percent lower than the prior year for our key product lines, overall gross profit as a percent of net sales equaled the prior year's third quarter."
Third Quarter Results
The Birmingham, Alabama-based company reported net earnings of $54.23 million or $0.43 per share for the third quarter, down from $59.05 million or $0.53 per share in the prior-year quarter.
The results for the latest quarter include earnings from discontinued operations of $6.31 million or $0.05 per share, compared to loss of $0.77 million or $0.01 per share last year. Earnings from continuing operations for the quarter dropped to $47.92 million or $0.38 per share from $59.82 million or $0.54 per share in the year-ago quarter.
On average, fifteen analysts surveyed by Thomson Reuters expected the company to earn $0.37 per share for the third quarter. Analysts' estimates typically exclude special items.
Cash earnings for the quarter declined to $114.66 million from $155.65 million a year ago.
Total revenues for the quarter declined to $778.19 million from $1.01 billion in the same quarter last year, and missed twelve Wall Street analysts' consensus estimate of $809.17 billion.
Segmental Details
Total net sales for the quarter were $738.66 million, down from $958.84 million in the comparable quarter a year ago, and delivery revenues declined to $39.53 million from $54.51 million in the third quarter of 2008.
Product wise, aggregates revenues fell to $532.94 million from $661.96 million in the year-ago quarter. Aggregates shipments declined 20%, reducing earnings by $0.46 per share, with pricing increasing 2.4% and cash fixed costs declining 12%.
Asphalt mix and concrete revenues of $243.21 million was also lower than $340.68 million in the prior-year quarter, but asphalt material margins improved due to lower costs for liquid asphalt, offsetting a 19% drop in volumes.
Revenues for cement were $19.83 million, down from $25.61 million last year, hurt by weaker sales volumes, slightly offset by lower energy costs.
Other Metrics
Operating earnings for the third quarter dropped to $82.70 million from $128.30 million in the prior-year quarter, while operating margin was down 220 basis points to 11.2% from a year ago's 13.4%.
Gross profit was $154.48 million, down from $200.85 million in the year-ago quarter, while gross profit margin was flat with last year at 20.9%. However, adjusted for depreciation, depletion and amortization, gross profit margin increased 300 basis points to 33.9% from last year's 30.9%.
Cost of revenues declined to $623.71 million from $812.50 million in the same quarter last year. Selling, general and administrative expenses for the quarter increased to $79.56 million from $76.36 million in the year-ago quarter, and gain on sale of property, plant & equipment and businesses totaled $7.80 million, higher than $2.25 million in the comparable quarter a year ago.
The company ended the third quarter with cash and cash equivalents of $46.55 million, compared to $90.97 million at end of the prior-year quarter.
Nine-Month Highlights
For the nine-month period, Vulcan reported net earnings of $43.66 million or $0.37 per share, sharply down from $213.74 million or $1.93 per share in the prior-year period. Earnings from continuing operations plunged to $31.23 million or $0.27 per share from $215.53 million or $1.94 per share in the year-ago period.
Total revenues for the year-to-date period declined to $2.10 billion from $2.85 billion in the same period last year.
Looking ahead………
"Our ongoing focus on managing costs and improving productivity will enhance our ability to increase earnings as the economy recovers and construction activity improves," James added.
Looking ahead to fiscal 2009, the company now expects full year capital spending to be about $140 million, down from $175 million projected at the end of the second quarter and down sharply from the $353 million spent in fiscal 2008.
Stock Quote
VMC closed Monday's regular trading session at $47.12, up $1.09 or 2.37% on a volume of 1.94 million shares, higher than the three-month average volume of 1.26 million shares. In the past 52-week period, the stock has been trading in a range of $34.30 to $77.95.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.