Vulcan rises higher

Score another strong quarter for Vulcan. Vulcan Materials Co. reported that its second-quarter net income rose as it increased prices for its product lines. The company reported net profit of $147.7 million, or $1.45 per share, compared with $121.5 million, or $1.17 per share, a year earlier. Second-quarter net sales were $808 million, an increase of about 15 percent from the prior year's level, it said, adding that while energy costs increased, pricing also improved.

"Overall, we expect the broad strength in public infrastructure and private nonresidential construction in our markets to more than offset weaker residential construction activity in certain key markets," Chief Executive Don James said. "Aggregates pricing improved 13 percent, driving aggregates earnings and margins higher despite increased energy costs. Our asphalt and concrete product lines also realized considerable growth in earnings and margins as price improvements more than offset higher costs for key raw materials. Following a very strong increase in the first quarter, second quarter shipments of aggregates were somewhat lower than a year ago. Year-to-date, aggregates shipments have met our expectations of 4 percent growth above our all-time record first-half shipments in 2005 and are consistent with the upper end of our full year guidance for 2006. The company attributed the overall decrease in production due to bad weather in California.

“Construction spending remains strong due to continuing economic and infrastructure growth,” James said. “Our broad geographic footprint, with operations strategically located in high growth U.S. markets, positions us to benefit from the continuing strength in construction activity and provides regional diversification. Highway construction should benefit from both higher funding as a result of the new multi-year federal highway bill passed in 2005 and improving state and local tax receipts. The recovery in private nonresidential construction appears to be broad-based and is evident in most categories of this end market. Approximately 75 percent of our aggregates shipments go to public construction and private nonresidential construction and we are well positioned to benefit from growing demand in these end markets. Residential construction activity remains at high levels. Key markets such as Texas and Georgia continue to have significant backlogs of residential construction activity while in certain other markets, such as California, Arizona and Florida, residential demand is slowing."Your comment?