Vulcan Earnings: Pricing Gains Buffer Effect of Declining Shipments Amid Private-Sector Slowdown

Narrow-moat-rated Vulcan Materials reported strong first-quarter results that included robust pricing gains and a moderate pullback in shipments. Revenue increased 7% year over year, largely driven by robust growth in the aggregates business. Gross margin expanded 90 basis points year over year to 18.3% as higher raw material costs were offset by higher selling prices. End-market demand remained mixed as pullbacks in residential construction were met with somewhat stable nonresidential demand while public spending made sequential improvements. We've increased our fair value estimate to $146 per share from $145 due to the time value of money.