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Vulcan Materials (NYSE:VMC) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

Vulcan Materials Company (NYSE:VMC) is scheduled to report Q3 earnings results before markets open for trading on November 5, 2020.

The company is expected to report earnings of $1.61/share on revenue of $1.372 billion. The consensus earnings per share (EPS) of $1.61/share is based on a poll of 19 analysts and represents a decline in eps of −3.9% over the same quarter last year, when the company reported earnings of $1.68/share.

The revenue forecast of $1.372 billion based on a poll of 16 analysts implies a year-over-year (YoY) decline in revenue of −3.3%. Last year the company reported $1.419 billion in revenue for the quarter.

Expected to report EPS contraction of −3.9% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,372.08 $1,418.76 −3.3%
EPS $1.61 $1.68 −3.9%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, missed 2 quarters, and met expectations 1 quarter.

What are your expectations from Vulcan Materials Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.39 $1.60 15.1% Beat
Q1, 2020 $0.43 $0.47 9.3% Beat
Q4, 2019 $1.17 $1.08 −7.7% Missed
Q3, 2019 $1.72 $1.68 −2.2% Missed
Q2, 2019 $1.48 $1.48 0.0% Met
Q1, 2019 $0.37 $0.46 25.4% Beat
Q4, 2018 $0.89 $0.99 10.8% Beat
Q3, 2018 $1.39 $1.40 0.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 7.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 4, 2020 $117.53 $126.54 7.7% Increase
May 6, 2020 $108.04 $102.18 −5.4% Decline
February 18, 2020 $146.97 $135.40 −7.9% Decline
November 6, 2019 $141.03 $137.41 −2.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.74, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.74 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

Vulcan Materials Company is currently trading at $138.52/share, down −2.5% for the day. The company is trading at approximately 90.2% of its 52-week high of $153.88/share. The company’s stock price is up 9.5% since the last earnings report and down −4.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 51.82 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:VMC Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 28.94 and a forward P/E multiple of 30.06.

Vulcan Materials Company’s current share price also implies a price-to-book (P/B) multiple of 3.17. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $138.52
P/E Ratio 28.9x
P/E Ratio (Fwd) 30.1x
PEG Ratio 2.8
Total Debt / Total Capital 16.5%
Levered Free Cash Flow $726.4 million
EV / EBITDA 16.5x

Finbox

Vulcan Materials Company is a large-cap stock with a market capitalization of $18.821 billion and a total enterprise value of $21.728 billion. The company operates in the Materials sector and the Construction Materials industry.

Vulcan Materials Company produces and supplies construction materials primarily in the United States. The company operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The Aggregates segment provides crushed stones, sand and gravel, sand, and other aggregates; and related products and services that are applied in construction and maintenance of highways, streets, and other public works, as well as in the construction of housing and commercial, industrial, and other nonresidential facilities. The Asphalt Mix segment offers asphalt mix in Alabama, Arizona, California, New Mexico, Tennessee, and Texas. The Concrete segment provides ready-mixed concrete in California, Maryland, New Mexico, Texas, Virginia, Washington D.C., and the Bahamas. The Calcium segment mines, produces, and sells calcium products for the animal feed, plastics, and water treatment industries. The company was formerly known as Virginia Holdco, Inc. and changed its name to Vulcan Materials Company. Vulcan Materials Company was founded in 1909 and is headquartered in Birmingham, Alabama.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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