DOW JONES NEWSWIRES
Vulcan Materials Co.'s (VMC) second-quarter profit slumped 84%
amid a prior-year divestiture and falling demand as the largest
U.S. producer of construction aggregates posted results below
expectations.
The company late Monday also cut its 2009 profit target for
continuing operations to 40 cents to 65 cents from June's downbeat
forecast of 70 cents to $1.
But the stone quarrier, which posted a profit after two
quarterly losses in a row, expressed some positives. Chairman and
Chief Executive Don James noted increased activity by state
transportation departments and "significant" increases in highway
contracts awarded in May and June.
James said the activity shows federal-stimulus money "is working
its way into the economy. We expect construction activity" related
to the recent awards to begin by year's end and notably help
aggregates demand in 2010.
Vulcan has suffered as the housing market downturn and recession
halted construction projects. The company has cut costs and
production and in June, halved its dividend and raised $520 million
in a stock sale to reduce debt.
The company reported a profit of $22.2 million, or 20 cents a
share, down from $140.8 million, or $1.27 a share, a year earlier.
The latest quarter included 6 cents of earnings from discontinued
operations while the prior year had $80.5 million in divestiture
gains. In June, Vulcan predicted earnings from continuing
operations of 15 cents to 30 cents.
Revenue dropped 29% to $721.9 million as shipments slumped 31%
and prices rose 3%. Analysts' latest estimate was $759.1 million,
according to a poll by Thomson Reuters.
Gross margin fell to 20.2% from 24%.
Vulcan shares closed Monday at $47.80 and were inactive
premarket. The stock is down 31% this year.
-By Kathy Shwiff and Kevin Kingsbury, Dow Jones Newswires;
212-416-2357; Kathy.Shwiff@dowjones.com
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