Martin Marietta Earnings: Weather Impacts Weigh on Shipments, but Pricing Remains Strong

Narrow-moat-rated Martin Marietta Materials navigated significant weather events during the third quarter, which affected results across its portfolio. Net sales declined 5.3% year over year, mainly due to weather-related shipment delays and offsetting effects from the divestiture of the company’s south Texas business and the acquisition of 20 aggregates operations from Blue Water earlier this year. Construction end markets continue to navigate higher interest rates, with residential constriction faring worst in the quarter. Storms and hurricanes had significant effects across the company’s network during the quarter, but we expect much of the delayed shipments will be pushed for the fourth quarter or early next year. As such, we maintain our $370 fair value estimate.