Martin Marietta Materials Inc (NYSE:MLM) shares are trading lower after the company reported a second-quarter FY24 revenue decline of 3% Y/Y to $1.764 billion, missing the consensus of $1.846 billion.

Adjusted EPS of $5.26 missed the consensus of $5.40.

Gross profit was $517 million (-8% Y/Y), and the margin contracted to 29% from 31% a year ago.

Building Materials business revenue was $1.7 billion (-3% Y/Y), and the corresponding gross profit was $501 million (-7% Y/Y).

Aggregate shipments decreased by 2.8% to 53 million tons, while the average selling price increased by 11.6%, or 12% on an organic mix-adjusted basis.

Adjusted EBITDA declined 2% Y/Y to $584 million in the quarter. Martin Marietta's operating cash flow for the six months stood at $173 million, compared with $519 million for the prior year.

The company held $109 million of unrestricted cash and $1.2 billion of unused borrowing capacity on its existing credit facilities as of June 30, 2024.

The company returned $542 million to shareholders through dividend payments and share repurchases during the six-month FY24. As of June 30, 2024, there were 11.9 million shares remaining under the current repurchase authorization.

Martin Marietta CEO Ward Nye said the company experienced "a series of factors in the second quarter" impacting product shipments.

"Historic precipitation in Texas and in parts of the Midwest, together with ongoing restrictive monetary policy, curtailed volumes for the three-month period," he added.

The quarter also included the April 5 acquisition and subsequent integration of the Blue Water Industries operations. The deal expands Martin Marietta's nationwide presence "into attractive SOAR 2025 target markets including Tennessee and South Florida."

2024 Guidance Lowered: Martin Marietta Materials lowered revenues to $6.50 billion-$6.94 billion (from $6.9 billion-$7.3 billion) vs. consensus $7.042 billion and adjusted EBITDA to $2.10 billion-$2.30 billion (from $2.3 billion-$2.44 billion).

The company expects average selling price growth of 11%-13% for Aggregates.

Nye added, "Putting the quarter in broader perspective, recent macroeconomic data indicates that the typical lag effects of restrictive monetary policy are slowing product demand in the interest-rate-sensitive private construction sector."

The company expects this rate-driven private construction softness will be "relatively short-lived."

Single-family housing remains underbuilt, the company states. Recent inflation and employment data should provide support "for more accommodative monetary conditions beginning in September."

Investors can gain exposure to the stock via TCW Transform Supply Chain ETF (NYSE:SUPP) and Invesco Building & Construction ETF (NYSE:PKB).

Price Action: MLM stock is trading lower by 1.54% at $530.00 premarket at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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