Building Material Company Martin Marietta's Q3 Bottomline Beats Despite Softer Demand In Certain Midwest & Southwest Markets: Here's Details

Martin Marietta Materials, Inc. MLM reported third-quarter FY23 revenue growth of 10.1% year-over-year to $1.994 billion, marginally missing the consensus of $1.999 billion.

EPS from continuing operations was $6.94, compared to $4.67 a year ago, beating the consensus of $6.06.

Gross profit was $676 million (+38.6% Y/Y), and the margin expanded by 698 bps to 33.9%. The operating margin was 28.4%, up by 600 bps YoY.

Adjusted EBITDA improved 32.3% Y/Y to $705.2 million, margin expanded by 594 bps to 35.4%.

MLM's operating cash flow year-to-date was $972.5 million compared with $560.7 million for the prior-year period.

The company held $647.6 million of cash and equivalents and $1.20 billion of unused borrowing capacity on its existing credit facilities as of September 30, 2023.

The company returned $278.2 million to shareholders through dividend payments and share repurchases for the nine months ended September 30, 2023.

Building Materials business revenue was $ 1.9 billion (+10.5% Y/Y), and the corresponding gross profit was $649.5 million (+38.4% Y/Y).

Aggregate shipments decreased by 7.3%, while pricing increased by 20%, or 17.2%, on a mix-adjusted basis.

"Consistent with our aggregates-led product focus, on October 31, 2023, we closed the sale of our Tehachapi, California cement plant for $315 million, which largely concludes planned asset sales from the 2021 Lehigh Hanson West acquisition. This divestiture not only improves our product mix, but also provides additional balance sheet flexibility to redeploy the proceeds into pure-play aggregates acquisitions," commented Ward Nye, Chairman and CEO.

FY23 Guidance: Martin Marietta Materials now expects FY23 total revenues of $6.735 billion-$6.855 billion (prior $6.725 billion-$6.86 billion) vs. consensus $6.85 billion and adjusted EBITDA of $2.05 billion-$2.15 billion (prior $2 billion-$2.1 billion).

The company expects average selling price growth of 18%-20% (prior 17%-19%) for Aggregates. 

Price Action: MLM shares are trading higher by 5.39% at $431.00 on the last check Wednesday.