RALEIGH, N.C. (May 3, 2011) -- Martin Marietta Materials Inc. (NYSE:MLM) today announced results for the first quarter ended March 31, 2011.
"Our first-quarter financial results confirmed our expectations, reflecting a 240-basis-point improvement in our consolidated operating margin (excluding freight and delivery revenues) over the prior-year quarter," said Ward Nye, president and CEO of Martin Marietta Materials. "I am especially pleased our Aggregates business experienced greater levels of stability during the quarter. In particular, aggregates product line pricing, supported partly by 2010 volume growth, increased for the first time in more than a year. We believe this pattern of stability will continue."
Notable points for the quarter (comparisons are with the prior-year quarter)
- Net sales increased to $306.2 million compared with $295.6 million
- Loss per diluted share of $0.39 compared with loss per diluted share of $0.54
- Increased diesel costs negatively affected earnings by $0.05 per diluted share
- Heritage aggregates product line pricing up 0.4%
- Heritage aggregates product line volume down 1.2%
- Specialty Products record first-quarter earnings from operations of $15.1 million
- Selling, general and administrative (SG&A) expenses down 190 basis points as a percentage of net sales
"Since heavy-construction activity slows during the winter months, our first-quarter results seldom reflect annual performance," Nye continued. "That said, milder weather in some of our markets early in the quarter led to monthly aggregates shipment growth over the prior-year periods. In contrast to 2010, weather patterns deteriorated in the critical last two weeks of March, slowing momentum gained early in the quarter. We believe these weather-related delays in shipments were a primary factor leading to an overall quarterly decrease of 1% in our heritage aggregates volume. However, despite a volume decrease for the quarter and the negative impact of rising diesel prices, we achieved an incremental operating margin (excluding freight and delivery revenues) for our Aggregates business, in line with our expectations.
"Infrastructure as our largest end-use market, comprises approximately half of our quarterly aggregates shipments. Uncertainty stemming from the absence of a long-term federal highway bill has negatively affected the infrastructure construction market. For the quarter, infrastructure shipments declined 3% compared with the prior-year quarter.
"The residential end-use market volume grew 15% compared with the prior-year quarter, reflecting increased multi-family construction activity. Our ChemRock/Rail end-use market experienced a 2% volume increase compared with the prior-year quarter. The commercial component of the nonresidential end-use market, particularly in our San Antonio District, reflected increased shipments during the quarter. While we continue to expect strong volumes to the energy sector for the full year, shipments to this industry declined from the prior-year quarter, which led to an overall 3% reduction in nonresidential shipments.
"Compared with the prior-year quarter, changes in aggregates pricing varied by geographic region. In the first quarter of 2011, more of our markets reported pricing increases than in the past two years. For example, quarterly heritage aggregates pricing for the Southeast Group increased 5.8%, with price increases in the Florida market compensating for a price decrease in the Alabama market. Pricing in the West Group was negatively affected by product mix, particularly in the Southwest market. Other markets in the West, including North Texas and Iowa, had pricing increases.