Martin Marietta Materials (NYSE:MLM) released first-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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The full earnings call is available at https://edge.media-server.com/mmc/p/eajqs9v6/
Summary
Martin Marietta Materials reported a strong start to 2026 with a 17% increase in revenue, reaching $1.4 billion, driven by a 7.2% growth in organic aggregate shipments.
The company reaffirmed its full-year 2026 adjusted EBITDA guidance of $2.43 billion at the midpoint, citing robust infrastructure and non-residential demand.
The Quikrete Asset Exchange was completed, providing $450 million for further aggregate acquisitions, and the acquisition of New Frontier Materials is expected to close in the second half of the year.
Operational highlights include the strongest first-quarter safety performance in the company’s history and record first-quarter shipments in core aggregates and specialties business.
Management emphasized confidence in the durability of construction demand, driven by ongoing infrastructure investment and strong non-residential construction activity.
Full Transcript
OPERATOR
Ladies and Gentlemen, welcome to Martin Marietta Materials’ first quarter 2026 earnings conference call. All participants are currently in a listen only mode. A question and answer session will follow the Company’s prepared remarks. As a reminder, today’s call is being recorded and will be available for replay on the Company’s website. I will now turn the call over to your host, Ms. Jacqueline Rooker, Martin Marietta Materials’ Vice President of Investor Relations. Jacqueline, you may begin.
Jacqueline Rooker (Vice President of Investor Relations)
Good morning and thank you for joining Martin Marietta Materials’ first quarter 2026 earnings call. With me today are Ward Nye, Chair, President and Chief Executive Officer and Michael Petro, Senior Vice President and Chief Financial Officer. As a reminder, today’s discussion may include forward looking statements as defined by United States Securities Laws. These statements relate to future events, operating results or financial performance and are subject to risks and uncertainties that could cause actual results to differ materially. Martin Marietta undertakes no obligation to publicly update or revise any forward looking statements except as legally required, whether due to new information, future developments or otherwise. For additional details, please refer to the legal disclaimers contained in today’s earnings release and other public filings, which are available on both our own and the Securities and Exchange Commission’s websites. Supplemental information summarizing our financial results and trends is available during this webcast and in the Investors section of our website. As a reminder, Our full year 2026 guidance summary on slide 5 reflects continuing operations only. Definitions and reconciliations of non GAAP measures to the most directly comparable GAAP measure are provided in the Appendix to the supplemental information in our SEC filings and on our website. Today’s earnings call will begin with Ward Nye, who will discuss our first quarter operating performance 2026 outlook, and supporting market trends. Michael Petro will then review our financial results and capital allocation details, after which Ward will provide closing remarks. Please note that all comparisons are to the prior year’s corresponding period. A question and answer session will follow. Please limit your Q&A participation to one question. I will now turn the call over to Ward.
Ward Nye (Chair, President and Chief Executive Officer)
Thank you Jacqueline Good morning and thank you for joining today’s teleconference. Before reviewing our first quarter results, I’ll take a moment to discuss the leadership appointment we announced earlier this week. As you may have seen, Chris Zamborski was appointed Martin Marietta Materials’ chief operating officer effective May 1. Chris is a highly respected and proven leader who most recently served as President of our west and Specialties Divisions. Under his leadership, both businesses delivered meaningful growth and strong operational execution since joining Martin Marietta in 2018, Chris has consistently made a significant and positive impact in every role he’s held. His deep operational experience, disciplined leadership style and strong commitment to our culture make him exceptionally well suited for this role. With Chris serving as COO, Kirk Light will assume leadership of our west and Specialties divisions while continuing in his role as President of our Southwest Division. In addition, our East Division President Oliver Brooks, Central Division President Bill Bedrazic, Vice President of Operational Excellence Ronnie Walker, and Vice President of Safety and Health Jessica Kosian will report directly to Chris. This appointment and enhanced leadership structure reflect the deep bench of talent across our divisions, districts and functions all focused on consistent execution, continuous improvement and a shared commitment to our One Culture. I’m pleased to welcome Chris to his new position and am confident that as COO he will continue to play a critical role in helping guide Martin Marietta to even greater success. With that, I’ll now turn to the quarter 2026 is off to a strong start with revenues increasing an impressive 17% to $1.4 billion. A new first quarter record organic aggregate shipments growth of 7.2% meaningfully exceeded our guidance, benefiting from an early start to the construction season in the Midwest and Colorado as well as continued strength in infrastructure and heavy nonresidential demand across our geographic footprint. As we look ahead, underlying fundamentals across the business remain favorable. Notably, the quarter’s Results reflect a 14% improvement in both adjusted EBITDA from continuing operations as well as adjusted earnings per diluted share from continuing operations. I’m especially pleased to report that our teams delivered the strongest first quarter safety performance in the company’s history as measured by both total and lost time incident rates. This achievement reflects the strength of our culture, unwavering commitment to world class safety and the operational discipline embedded throughout the organization. The quarter was also highlighted by the February 23rd closing of the Quikrete Asset Exchange, our largest aggregates acquisition to date. Importantly, this transaction accelerated our aggregates led strategy by shifting the portfolio away from more cyclical cement and concrete assets, enhancing the quality and durability of our earnings profile while providing $450 million of cash to redeploy into aggregate acquisitions. Accordingly, and consistent with the company’s SOAR 2030 strategic plan, on April 19th we entered into a definitive agreement to acquire New Frontier Materials, a complementary bolt on to our Central division that produces over 8 million tons of aggregates annually. This transaction is expected to close in the second half of the year, subject to regulatory approvals and other customary closing conditions. Looking ahead. Our MA pipeline remains active and is primarily focused on pure play aggregates opportunities across attractive sewer aligned geographies. As highlighted in this morning’s release. Our core aggregates product line delivered record first quarter shipments of 43.9 million tons, a 12% increase and record revenues of $1.1 billion representing a 14% increase. Our specialties business also achieved new all time quarterly records with revenues of $143 million up 63% year over year and gross profit of $45 million, an increase of 17%. Despite ongoing macroeconomic uncertainty and volatility, we continue to benefit from a business intentionally built for durability and resilience, enabling us to remain focused on what we can control regardless of underlying economic trends. With April’s continued strong product demand, the impact of April 1st price increases and ongoing OPTIM efforts, we’re reaffirming Our full year 2026 adjusted EBITDA from continuing operations guidance of $2.43 billion at the midpoint. Turning to end market trends, we continue to see a constructive backdrop for US Infrastructure. Our most aggregates intensive and countercyclical end market sustained federal and state investment continues to provide meaningful multi year funding visibility and as we look ahead to the next surface transportation reauthorization. Notably, a significant portion of authorized funding under the Infrastructure Investment and Jobs act, or IIJA, has yet to be deployed, with nearly half of highway and bridge funding remaining undistributed as of late February. Policymakers are negotiating a five year successor surface transportation bill with committees targeting reauthorization by October 1st following the current IIJA’s expiration on September 30th. While the timing remains subject to the legislative process and could include an interim continuing resolution, industry commentary from the American Road and Transportation Builders of America or ARTBA, indicates that state departments of transportation retain multi year visibility into their project pipelines and continue to plan under assumptions of stable federal funding. As a result, we do not expect a short term continuing resolution to disrupt construction activity in 2026 and for the near future. Beyond infrastructure, heavy non residential construction demand continues to be driven by robust data center and power generation activity aggregates. Intensive LNG projects along the Gulf coast is also gaining momentum, including projects such as the one at Port Arthur LNG, which Martin Marietta is actively supplying. Warehouse and distribution construction trends continue to recover as shipments inflected positively in the third quarter of 2025 and have continued to trend favorably. By contrast, affordability pressures tied to higher interest rates continue to influence the pace of light, non residential and and residential construction activity. Taken together, all these trends underscore the durability of long term construction demand across our footprint and bode well for our company and shareholders. I’ll now turn the call over to Michael to discuss our first quarter financial results. Michael, over to you.
Michael Petro (Senior Vice President and Chief Financial Officer)
Thank you Ward and good morning everyone. As Ward noted, our core aggregates business delivered record first quarter revenues of $1.1 billion, up 14% year over year driven by organic shipment growth of more than 7% and approximately one month of acquisition contributions. Daily shipments have continued to trend above expectations in April, led by infrastructure and non residential strength in our east division, organic pricing in the first quarter was negatively impacted by geographic mix, driven primarily by robust organic shipment growth of more than 20% in our Central and West divisions which carry lower average selling prices and gross margins than our east and Southwest divisions reported aggregates Gross profit declined 3% to $288 million as stronger volumes and underlying organic pricing improvements were more than offset by geographic mix and purchase accounting impacts, including a non cash $22 million charge associated with the fair market value step up of quickrete inventory as well as higher depreciation, depletion and amortization expense which is now disclosed within our product line reporting. Importantly, underlying organic cost of goods sold per ton excluding pass through freight cost and timing related items is tracking below our implied 3% guidance as cost optimization efforts continue. Other building materials revenues declined 5% to $116 million and consistent with typical first quarter seasonality posted a $16 million gross loss driven by customary asphalt plant winter shutdowns in both Colorado and Minnesota. Our specialties business delivered revenues of $143 million and gross profit increased 17% to $45 million, both all time quarterly records reflecting contributions from the July 2025 Premier Magnesia acquisition and and organic pricing gains which were partially offset by lower organic shipments and higher energy costs. Turning to capital allocation, completion of the Quikrete asset exchange on February 23rd marked a significant milestone for the company, concluding our SOAR 2025 divestiture program providing $450 million in cash and simultaneously representing the largest aggregates acquisition in our history. With this transaction complete, We’ve now launched SOAR 2030 supported by a strong balance sheet and a focus on aggregates led acquisitive growth. The quikcrete integration is progressing ahead of plan with results since closing exceeding both our EBITDA and margin expectations. Further, we expect to realize synergies of approximately $50 million over the coming years as we normalize unit Profitability Importantly, the $450 million of cash proceeds combined with the company’s significant free cash flow generation provides ample capacity to advance our very active M&A pipeline and opportunistically repurchase shares during times of market volatility. Consistent with this capital deployment framework, we repurchased $200 million of shares in the first quarter and announced the acquisition of New Frontier Materials, which complements our differentiated position along the I 70 corridor from Kansas City to St. Louis. Please note that our reaffirmed 2026 guidance does not include contributions from New Frontier as the transaction has not yet closed. Consistent with historical practice, we will revisit guidance at midyear. With that, I will now turn the
Ward Nye (Chair, President and Chief Executive Officer)
call back over to Ward. Thank you, Michael the first quarter of 2026 marked the launch of SOAR 2030, an important milestone in the continued evolution of our company’s portfolio. Our increasingly aggregates led foundation was strengthened by the closing of the Quikrete Asset Exchange and further reinforced by additional bolt on aggregates acquisition activity already announced this year. Combined with our high performing differentiated specialties business, these actions have created a resilient and durable enterprise. This streamlined and focused portfolio supported by attractive long term demand drivers, advantaged market positions and and culture deeply rooted in safety, commercial and operational excellence, reinforces our confidence in SOAR 2030, and our ability to deliver sustainable growth and enduring value creation for our shareholders. If the operator now provides the required instructions, we’ll turn our attention to addressing your questions
OPERATOR
and thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press Star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press Star one a second time. If you’re called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is Star one to join the queue and our first question comes from the line of Trey Grooms with Stevens. Your line is open.
Ward Nye (Chair, President and Chief Executive Officer)
Hey, good morning Ward and Michael. Thanks for taking my question. So, given the more challenging near term cost environment, particularly around diesel and potentially softer residential demand backdrop, Ward, could you walk us through some of the key assumptions that are supporting your decision to reiterate the full year EBITDA guidance? Specifically, maybe how you’re thinking about the cadence of pricing through the year, including any catch up to the higher diesel costs and you know what level maybe of incremental or Mid year increases is embedded in that outlook. Thank you. That’s right. Thanks for the question. Good to hear your voice. So several things. One, as you noted, we are reaffirming our guidance for the year relative to EBITDA. We feel very confident in that. As you know, this actually excludes anything from New Frontier because that hasn’t closed yet. Secondly, we tend to come back at midyear and reassess our guidance. I’ll tell you right now I’m feeling pretty optimistic about what that reassessment is going to look like. So I’m looking forward to that at mid year. I would say several things. One, if we just think about some of the reasons why, if we’re looking at our shipment trends, as you may recall, when we announced our guide in February for the year, we said if there was any place that we thought we were being a little bit probably conservative on, it may be on the shipment outlook. You can see how that came through in Q1. You can also tell from the prepared remarks today and the headlines to the, to the release that April has come out of the box very attractively as well. So my guess is we’re going to see shipments probably trending to the higher end of the guide relative to pricing. I’m not looking at pricing and having any concern about how I think that’s going to roll out for the year. We did call out in the prepared remarks, I know Michael did that what we saw in the Central and West groups in particular was volumes up 21%. I mean that’s a big number. And keep in mind, pricing there is notably lower, and by that I mean dollars per ton lower than it is in the East and the Southwest. And so what we’ve seen so far in April is we’re seeing that mix flow back to the type of cadence that we would ordinarily expect. So we’re seeing the east really catch up nicely with that. Keep in mind too, I anticipate we’re going to see a greater realization of mid year price increases this year than we saw last year. Clearly the diesel impact and others will be a driver on that. That is not taken into account in our guide. So again, it’s something that gives me a lot of confidence in what we’re doing. I know part of your question dealt very specifically with diesel and how we see that. So if you think about the fact that we’re going to consume, let’s call it 55 ish million gallons of diesel fuel this year, that’s assuming that diesel prices peak probably in Q2 and then return not to lower levels, but probably somewhat more moderated levels in Q3 and Q4. We feel like the overall impact from diesel headwinds, and that’s including other items impacted by it, will be about $36 million in the aggregates business, probably $50 million for the entire company. So it’s not going to be anything that’s material. The other thing that I would remind you is if we go back in time and remember what diesel pricing looked like back when Ukraine and Russia first started their conflict, diesel spiked. And then we saw that headwind for a while, and then we actually saw a nice margin expansion actually later that year. This is not as pronounced as that was at the time. So I feel like it’s very manageable. And again, to your point, with what’s going on in infrastructure and what’s going on with heavy non-residential activity, I think the volume backdrop will continue to be very attractive. But Trey, I hope that helps.
Trey Grooms
That did. That was super helpful, Ward. And specifically on that 36 million you’re talking about for 2Q, I’m guessing it’d be more weighted there.
Ward Nye (Chair, President and Chief Executive Officer)
Any color, just for our modeling, it is weighted more there. I’ll turn it over to Michael to talk to you a little bit more about any modeling questions you may have.
Michael Petro (Senior Vice President and Chief Financial Officer)
Yeah, Trey, you’re absolutely right. So we’re thinking about 20 to 25 million of it coming through in Q2, given where spot rates are. But just in terms of the organic cost cadence as compared to last year. Remember in Q1 of last year, we had sub 2.5% cost of goods sold (COGS) per ton growth. And then we had 6ish percent in Q2 and Q3 and 4 in Q4. So we’ve now passed the tough cost comp growth. And so we feel very good about the implied cost per ton through the balance of the year, assuming we do get a little bit of diesel headwind embedded in there as well.
Trey Grooms
Got it. All right, thanks for the color. I’ll pass it on.
OPERATOR
And our next question comes from the line of Catherine Thomson with Thomson Research Group. Your line is open.
Catherine Thomson
Hi. Thank you for taking my question today and appreciated your color and prepared commentary on the reauthorization of IIJA. So we have been speaking to a wide variety of contacts on this bill reauthorization. And the general theme is no bill is going backwards on funding the House is what we’re hearing is $$550 billion. Sounds like it fits pretty close to what you’re also saying. But I think the important thing, too, just to clarify is how much of this is going to be true surface transportation versus the $350 …
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