Robust Construction Demand Drives Top Line Growth for Martin Marietta In Second Quarter

Narrow-moat-rated Martin Marietta's second-quarter results were largely in line with our expectations. While top line growth was strong, margins were pressured from continued cost inflation. Net sales increased 19% year over year as aggregates, cement, and asphalt all saw double digit volume growth. Gross margins declined roughly 200 basis points to 25.9% compared to a year ago due to higher energy and freight costs. These additional costs were partially offset by pricing action taken in April. Management noted that there will be broad third-quarter price increases across all products and they will likely take additional pricing action in the fourth quarter.