(RTTNews) - Vulcan Materials Co. (VMC: News ), the largest U.S. producer of construction aggregates, Monday reported an 84% fall in profit for the second quarter from last year, hurt by the decline in demand for construction materials amid the economic slowdown. Aggregates shipments for the quarter declined 31% from the prior year due to weak demand and wet weather. The company lowered its fiscal year 2009 earnings outlook, citing further weakness in private construction activity.

The cement, asphalt and gravel supplier is expected to benefit from the volume of public works projects in the federal government's stimulus spending plan. The Economic Stimulus Plan passed by Congress and signed by President Barack Obama in February includes an estimated $50 billion to $60 billion of much-needed direct funding for transportation and other infrastructure-related projects that will help offset projected weakness in private construction activity.

Second-Quarter Results

The Birmingham, Alabama-based company reported net income for the second quarter of $22.21 million, or $0.20 per share, down from $140.76 million, or $1.27 per share, in the year-ago quarter.

The company noted that a change in the estimated annual effective tax rate reduced earnings by $0.06 per share. In addition, aggregates shipments declined 31% from the prior year due to weak demand and wet weather, reducing earnings by $0.64 per share.
Earnings from continuing operations for the quarter was $15.56 million, or $0.14 per share, down from $141.23 million, or $1.27 per share, in the prior-year quarter. On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.20 per share for the quarter.

Net sales for the quarter dropped 29% to $681.38 million from $965.96 million in the same quarter last year. Total revenue, which is net sales plus delivery revenue, also declined 29% to $721.86 million from $1.02 billion in the same period last year and missed analysts' consensus revenue estimate for the quarter of $759.14 million.

Don James, Chairman and Chief Executive Officer of Vulcan, stated, "While our current results reflect the volume effect of the prolonged recession, we are encouraged by the increased level of bid activity by state transportation departments as well as the significant increase in highway construction contract awards reported in May and June. The increased level of bid activity and contracts awarded demonstrate that funding provided by the federal economic stimulus plan, or American Recovery and Reinvestment Act, is working its way into the economy."

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