Vulcan Materials (NYSE: VMC) reported Q2 EPS of $1.23, $0.13 worse than the analyst estimate of $1.36. Revenue for the quarter came in at $1.2 billion versus the consensus estimate of $1.16 billion.

Tom Hill, Chairman and Chief Executive Officer, said, "We remain on track with our full year expectations. Vulcan-served markets are experiencing stronger growth in demand than other markets, and higher public funding for transportation infrastructure is now converting to higher shipments of aggregates. Apart from geographic mix impacts, our pricing momentum continues to strengthen, including in our backlogged work. Our operating disciplines remain strong, and margins should continue to improve as we turn the corner on costs related to last year\'s storms.

"We expect the strong aggregates shipment growth seen in the second quarter to continue for the balance of the year. We now project full year same-store shipment growth of between 7 and 9 percent, albeit at a lower-priced geographic mix. We reiterate our full-year expectations for 2018 earnings from continuing operations of between $4.00 and $4.65 per diluted share and Adjusted EBITDA of between $1.15 and $1.25 billion."

Second Quarter Summary (compared with prior year\'s second quarter)

• Total revenues increased $169 million, or 16 percent, to $1.2 billion
• Gross profit was $323 million versus $290 million in the prior year
• Aggregates segment sales increased $139 million to $956 million and freight-adjusted revenues increased $99 million, or 16 percent, to $731 million
  • Shipments increased 7 million tons, or 15 percent, to 55 million tons
  • Freight-adjusted sales price increased 1 percent to $13.29 per ton
  • Segment gross profit increased $32 million, or 13 percent, to $283 million
• Asphalt, Concrete and Calcium segment gross profit was $40 million, collectively
• SAG was $89 million, or 7.4 as a percentage of total revenues
• Net earnings were $160 million versus $120 million in the prior year
• Adjusted EBIT was $239 million versus $211 million in the prior year
• Adjusted EBITDA was $325 million, an increase of $37 million, or 13 percent
• Earnings from continuing operations were $1.20 per diluted share versus $0.83 per diluted share
• Adjusted earnings from continuing operations were $1.23 per diluted share versus $0.90 per diluted share (see Appendix 2 for reconciliation)

Demand and Earnings Outlook

Regarding the Company's earnings outlook for 2018, Mr. Hill stated, "Our business is positioned for continued shipment growth, compounding pricing improvements, and further gains in unit profitability in the second half of the year and into 2019. Public construction demand is beginning to join the sustained recovery in private demand and Vulcan-served markets are benefitting disproportionally.

"As a result, we expect aggregates shipment growth for the balance of the year consistent with that experienced in the second quarter. We also expect aggregates pricing to strengthen throughout the remainder of the year and heading into 2019. Geographic and product mix may continue to impact reported average selling prices, but the underlying direction remains clear, strongly supported by our strategic and tactical focus on compounding pricing improvements. The rate at which we convert same-store incremental revenues into incremental gross profit in the Aggregates segment should improve further in the second half, particularly as we move past the storm-related costs of 2017. In total, we project full year Aggregates segment gross profit in line with our beginning-of-year expectations, as stronger shipments work to offset higher diesel and other input costs.

"The full year 2018 gross profit contribution from our downstream segments likely will fall short of our beginning-of-year plans, primarily due to the impact of much higher liquid asphalt prices on material margins in our Asphalt segment. Asphalt prices have begun to rise in response to higher input costs, and we expect material margins to stabilize in the second half of the year.

"As noted, these trends continue to support our full year outlook for net earnings and adjusted EBITDA. These trends, particularly our strength in aggregates shipments supported by growth in public transportation infrastructure construction activity, also bode very well for Vulcan\'s continued progress toward its mid-cycle goals in 2019 and beyond."

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