Martin Marietta Materials on Tuesday reported that sales and profit dropped again in the fourth quarter as demand for the company's construction materials remained soft.
The Raleigh company, which produces rock, gravel and other materials, had revenue for the three months that ended Dec. 31 of $374.7 million, down 20 percent from the same quarter in the previous year. For the year, Martin Marietta's revenue dropped 19.5percent from 2008.
A provider of the raw materials used to build roads, subdivisions and commercial buildings, Martin Marietta is considered a bellwether for the construction industry.
Ward Nye, Martin Marietta's CEO and president, said the fourth-quarter numbers reflect a bad economy and a run of wet, cold weather that prevented many construction and road projects from being completed.
Martin Marietta's industry is going through its worst period since the Great Depression, as demand for construction materials has dropped by about 80million tons -- or 40 percent -- since it peaked in 2006.
Martin Marietta has had 15consecutive quarters of declining volume when compared to the same quarter in the previous year. The 123 million tons that the company shipped in 2009 was about the same amount of business it did in 1997.
The company has responded by cutting costs and hundreds of jobs over the past two years. Martin Marietta, which owns nearly 300 quarries in 28 states, had 4,600 employees at the end of 2009, down 6 percent from the beginning of the year.
Expenses were down 14percent for the fourth quarter; down 16 percent for the entire year.
Martin Marietta predicts volume will improve between 2 percent and 4percent in 2010. Nye said the company should get a boost from federal stimulus dollars, as only 15 percent of the stimulus money allocated for Martin Marietta's five biggest markets has been spent so far.
The company is dealing with state governments that are building less in the face of budget deficits.
Nye said the biggest question mark about 2010 is what will happen with the commercial construction industry. New building has slowed dramatically since the credit markets froze up and financing became extremely difficult.
"Commercial is the swing area on whether, really, we have a volume year that's flat, a volume year that's up or a volume year that's slightly down," Nye said. " ... it's the crisis of the two Cs: credit and confidence."
Martin Marietta's stock closed at $75.95, down 4.6percent for the day and off 26 percent from its recent high Sept. 17.
