Martin Marietta Materials (MLM), a leading supplier of aggregates and heavy building materials, has recorded a 44.07 percent surge in profit for the quarter ended Jun. 30, 2014, helped by growth in sales and expansion in margin.
The company earned $59.50 million or $1.27 a share in the second-quarter compared with $41.30 million or $0.89 a share a year ago. Analysts on average had predicted net income of $1.27 a share.
Revenue during the second-quarter grew 19.22 percent to $669.20 million from $561.30 million in the last year period.
Gross margin contracted by 120 basis points over the previous year period to 79.74 percent. Total expenses as a percentage of revenues decreased to 85.62 percent from 87.60 percent in the same period last year. That has resulted in improvement of 198 basis points in operating margins to 14.38 percent.
The company disclosed operating income of $96.20 million, compared with $69.60 million in the last year period.
Ward Nye, chairman, president and CEO of Martin Marietta, said, "Second-quarter 2014 results reflect strong operational performance and demonstrate our ability to significantly grow overall earnings and expand margins as construction activity begins to recover from historically low levels. Aggregates product line shipments increased in all geographic groups, led by a 22% improvement in the West Group. Aggregates product line pricing increases for the quarter were also widespread, leading to an overall increase of 5% compared with the prior-year period.
The powerful combination of increasing aggregates volume and pricing growth, along with quarterly record net sales for Specialty Products, resulted in record consolidated net sales of $602 million. Based on our performance through the first half of the year and key economic indicators, we are raising our full-year aggregates product line volume guidance to a range of 6% to 8% over 2013 levels."
Cash Flow
Martin Marietta Materials has generated cash of $70.40 million from operating activities during the first half, up 45.15 percent or $21.90 million when compared with the last year period. The company has generated 6.41 cents of operating cash flow in every sales dollar for the first half, up from 5.13 cents in the same period last year.
The company has spent $82.20 million cash to meet investing activities during the first half, as against cash outgo of $51.40 million in the last year period. It has made net capital expenditure of $84.70 million during the first half, which was higher by 69.40 percent or $34.70 million, from a year ago.
The company has generated cash of $3.70 million from financing activities during the first half, down 82.55 percent or $17.50 million, when compared with the last year period. It has borrowed net of $142 million through debt during the first half. It has raised net of $9.50 million by selling common stocks.
The company's cash dividend payment increased 0.54 percent or $0.20 million to $37.30 million. Dividend payment accounted for 52.98 percent of operating cash flow for the first half, compared with 76.49 percent in the same period previous year.
As on Jun. 30, 2014, the company's cash balance stood at $34.30 million, down 21.53 percent or $9.41 million from Jun. 30, 2013.
Debt Position
As on Jun. 30, 2014, total debt stood at $1084.80 million. The company's total debt was 32.32 percent of total assets as on Jun. 30, 2014. Its debt to equity ratio was at 0.69 as on Jun. 30, 2014.
Shares of the company declined $0.64 or 0.50 percent to settle at $128.53 on Wednesday.
