Martin Marietta Materials, Inc. MLM is scheduled to report fourth-quarter 2024 results on Feb. 12, before the opening bell.

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In the last reported quarter, the company’s earnings and revenues missed the Zacks Consensus Estimate by 7.8% and 1.7%, respectively. On a year-over-year basis, both metrics declined 15% and 5.3%, respectively.

Martin Marietta’s earnings topped the consensus mark in two of the last four quarters and missed on two occasions, with an average surprise of 1.6%.

Trend in MLM’s Estimate Revision

The Zacks Consensus Estimate for MLM’s fourth-quarter earnings is pegged at $4.60 per share, which decreased from $4.65 in the past 30 days. This implies a decline of 0.7% from the year-ago quarter’s reported figure of $4.63 per share.

The consensus estimate for net sales is pegged at $1.65 billion, indicating a 2.8% increase from the prior-year quarter’s figure of $1.61 billion.

Factors Likely to Shape Martin Marietta’s Quarterly Results

Martin Marietta’s fourth-quarter revenues are expected to have improved year over year on the back of strong pricing gains in aggregates, strength in public construction and accretive acquisitions. Pricing improvements and benefits from growth initiatives are likely to have aided sales and profits in the aggregates business.

MLM’s business has been sensitive to changes in construction spending, particularly housing and public construction. Strong state and federal investments in infrastructure, supported by the IIJA, are likely to have aided the company’s performance. Funding stability at both levels might have also contributed to its performance in the quarter by supporting volume stability and a favorable pricing environment in this aggregate-intensive market.

For the to-be-reported quarter, MLM expects a 5% increase in shipments, indicating a recovery from 4% decline in the previous quarter. This expectation is based on trends observed in October and reasonable estimations for the rest of the year.

Our model indicates aggregates pricing to increase to $22.24 per ton, marking 10% year-over-year growth. We expect aggregates revenues to increase to $1.20 billion from $1.02 billion a year ago.

We expect the Building Material segment revenues, which comprised 95.7% of total revenues in the third quarter of 2024, to increase 4.3% year over year to $1.60 billion. Our expectation for gross profit for the Building Material unit is pegged at $470.8 million compared with $461.3 million reported a year ago.

Our model predicts Magnesia Specialties revenues to increase 4.2% year over year to $79.2 million. We expect gross profit for the Magnesia Specialties unit at $21.9 million, down from $23 million reported a year ago.

However, this positive aspect is likely to have been counterbalanced by the challenges associated with aggregates volumes organically, due to adverse weather conditions. The company has been navigating the impact of severe storms, including Tropical Storm Debby in North Carolina, and Hurricanes Beryl and Helene in Texas and the Southeast. These weather events have been a negative indication for construction activity, particularly in the East Division, while potential weakness in the warehouse and residential sectors might have further impacted volumes.

We expect cement revenues to decline 32.5% year over year to $108.8 million. Our expectation for cement volume is pegged at 0.6 million tons, down 37% from a year ago. However, cement pricing is anticipated to rise 7.1% to $191.88 per ton.

Meanwhile, the bottom line of Martin Marietta is expected to have decreased year over year due to elevated operating costs. Higher cost inflation, a rise in transportation and insurance costs, as well as labor costs, are likely to have put pressure on the bottom line in the fourth quarter.

What the Zacks Model Unveils for MLM

Our proven model does not conclusively predict an earnings beat for Martin Marietta this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Earnings ESP of MLM: Martin Marietta has an Earnings ESP of -1.90%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

MLM Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks With the Favorable Combination

Here are some companies in the Zacks Construction sector that, according to our model, have the right combination of elements to post an earnings beat in the quarter to be reported.

Frontdoor, Inc. FTDR currently has an Earnings ESP of +60.00% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FTDR’s earnings for the fourth quarter of 2024 are expected to decline 45%. The company reported better-than-expected earnings in each of the last four quarters, the average surprise being 269%.

Trex Company, Inc. TREX has an Earnings ESP of +20.00% and a Zacks Rank of 2 at present.

TREX reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 9%. The company’s earnings for the fourth quarter of 2024 are expected to decrease 75%.

Watsco, Inc. WSO currently has an Earnings ESP of +0.94% and a Zacks Rank of 2.

WSO’s earnings for the fourth quarter of 2024 are expected to increase 3.4%. The company reported lower-than-expected earnings in each of the last four quarters, the negative average surprise being 10%.

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