Martin Marietta Materials shares surged 15 percent Tuesday after the Raleigh company reported fourth-quarter earnings that handily beat Wall Street estimates.
The company, which produces rock, gravel and other materials used to build roads, subdivisions and commercial buildings, has seen its business take off thanks to an improving economy and its recent acquisition of Texas Industries.
Investors were also buoyed by Martin Marietta’s announcement that it plans to buy back 20 million of its shares over the next three years, a figure that includes 5 million shares authorized in an earlier program. That’s roughly the amount of stock the company issued to acquire Texas Industries for $2.7 billion last year.
“Employment growth in the United States, a stimulus for construction activity, is at its highest rate since 2006,” CEO Ward Nye said in a statement. “Texas leads the nation in job growth, with widespread gains across many industry sectors ... .”
Sign Up and Save
Get six months of free digital access to The News & Observer
The Texas Industries acquisition added $238 million in net sales for the quarter, and $34 million in gross profit.
With the acquisition, Martin Marietta now operates a network of more than 400 quarries, distribution yards and plants in 36 states, Canada, the Bahamas and the Caribbean. The company has roughly 13.5 million tons of construction materials – known as aggregates – in reserve.
Excluding one-time acquisition costs, Martin Marietta posted earnings per share of 99 cents for the fourth quarter, well above the 83 cents forecast by analysts.
Revenue totaled $856.3 million, up from $545 million during the same period last year and above the $820 million forecast by analysts. Net sales were $779.5 million, a 59 percent increase over the $491.4 million during the same period last year.
Martin Marietta shipped 17 percent more materials in the fourth quarter than it did during the same period in 2013. Pricing was also up 7 percent. For the year, Martin Marietta reported net sales of $2.68 billion, up 38 percent from 2013.
The company forecasts that shipments of materials will increase 10 to 12 percent in 2015, with pricing rising 4 to 6 percent.
Martin Marietta shares closed Tuesday at $137.24, up $18.08. The stock is up 20 percent over the past year.