Unpacking Q2 Earnings: Vulcan Materials (NYSE:VMC) In The Context Of Other Building Materials Stocks

Let’s dig into the relative performance of Vulcan Materials (NYSE:VMC) and its peers as we unravel the now-completed Q2 building materials earnings season.

Traditionally, building materials companies have built competitive advantages with economies of scale, brand recognition, and strong relationships with builders and contractors. More recently, advances to address labor availability and job site productivity have spurred innovation. Additionally, companies in the space that can produce more energy-efficient materials have opportunities to take share. However, these companies are at the whim of construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. Additionally, the costs of raw materials can be driven by a myriad of worldwide factors and greatly influence the profitability of building materials companies.

The 9 building materials stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 1.5% while next quarter’s revenue guidance was 2.9% above.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

Luckily, building materials stocks have performed well with share prices up 15.2% on average since the latest earnings results.

Weakest Q2: Vulcan Materials (NYSE:VMC)

Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.

Vulcan Materials reported revenues of $2.01 billion, down 4.7% year on year. This print fell short of analysts’ expectations by 1.2%. Overall, it was a disappointing quarter for the company with a miss of analysts’ earnings estimates.

Tom Hill, Vulcan Materials' Chairman and Chief Executive Officer, said, "Our aggregates-led business delivered another quarter of earnings growth and margin expansion. Even with significant rainfall disrupting construction activity and operating efficiencies, our aggregates cash gross profit per ton increased 12 percent."

Vulcan Materials delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 3.9% since reporting and currently trades at $247.51.

Read our full report on Vulcan Materials here, it’s free.

Best Q2: UFP (NASDAQ:UFPI)

Beginning as a lumber supplier in the 1950s, UFP (NASDAQ:UFPI) makes a wide range of building materials for the construction, retail, and industrial sectors

UFP reported revenues of $1.90 billion, down 6.9% year on year, outperforming analysts’ expectations by 1.6%. The business had a very strong quarter with an impressive beat of analysts’ volume estimates and a decent beat of analysts’ operating margin estimates.

The market seems happy with the results as the stock is up 7.7% since reporting. It currently trades at $136.89.

Is now the time to buy UFP? Access our full analysis of the earnings results here, it’s free.

Tecnoglass (NYSE:TGLS)

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE:TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Tecnoglass reported revenues of $219.7 million, down 2.5% year on year, in line with analysts’ expectations. Still, it was a a satisfactory quarter as it posted full-year revenue guidance exceeding analysts’ expectations.

Interestingly, the stock is up 57% since the results and currently trades at $74.66.

Read our full analysis of Tecnoglass’s results here.

AZEK (NYSE:AZEK)

With a significant portion of its products made from recycled materials, AZEK (NYSE:AZEK) designs and manufactures goods for outdoor living spaces.

AZEK reported revenues of $434.4 million, up 12.1% year on year. This print beat analysts’ expectations by 9.5%. It was a very strong quarter as it also produced an impressive beat of analysts’ organic revenue and operating margin estimates.

AZEK achieved the biggest analyst estimates beat among its peers. The stock is up 20.9% since reporting and currently trades at $44.51.

Read our full, actionable report on AZEK here, it’s free.

Resideo (NYSE:REZI)

Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.

Resideo reported revenues of $1.59 billion, flat year on year. This print beat analysts’ expectations by 3.6%. It was a strong quarter as it also logged revenue guidance for next quarter exceeding analysts’ expectations and a decent beat of analysts’ ADI Global Distribution revenue estimates.

Resideo delivered the highest full-year guidance raise among its peers. The stock is up 6.7% since reporting and currently trades at $20.50.

Read our full, actionable report on Resideo here, it’s free.

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