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Martin Marietta beats expectations; shipments increase 14 percent in fourth quarter

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Martin Marietta Materials announced this morning that increasing demand for its products in the fourth quarter helped the company boost sales by 13 percent.

The Raleigh company, which produces rock, gravel and other materials used to build roads, subdivisions and commercial buildings, had sales of $368.8 million for the quarter that ended Dec. 31, up from 327.8 million in the same period in 2009.

Earnings per share were 32 cents, compared to a loss of 7 cents in the fourth quarter of 2009.

For the year, sales were $1.551 billion, up four percent from 2009. Earnings per share for the year were $2.10, compared to $1.91 the previous year.

That easily beat analysts expectations.

"Our financial results in October and November provide further validation of our previously stated view that volume recovery, combined with our lean operating cost structure, will lead to profit margin increase even without price increases," CEO Ward Nye said in a release.

Nye said the increase in sales in the fourth quarter was supported by an increase in state transportation spending, spending in the energy sector andn favorable weather through November.

For the year, Martin Marietta's shipments grew 5 percent.

Martin Marietta's outlook for next year will depend heavily on federal infrastructure spending.

Analysts with UBS Investment Research recently downgraded Martin Marietta Materials in a report because of fears that Republicans in Washington will scale back the nation's road building efforts as they seek to reduce spending.

The report cited House Republicans' release of a draft of revisions to the House rules that would remove the requirement that highway trust fund dollars be used specifically for road building and maintenance.

Nye said in this morning's release that Martin Marietta expects that state spending on infrastructure should remain steady and that 30 percent of stimulus infrastructure funds are expected to be spent in 2011.

"That said, uncertainty in long-term federal funding could negatively affect infrastructure spending," he noted. "Taking a conservative posture, our outlook is based upon the expectation that the infrastructure end-use market will be flat to slightly down; we anticipate a modest 2011 volume recovery in the commercial component of our nonresidential end-use market."

Martin Marietta shares closed at $90.65, up 2 percent for the day. The stock is up 14 percent over the last year.

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About the blogger

Business reporter David Bracken came to the N&O in 2004. He covers commercial and residential real estate. Contact David at 919-829-4548 or e-mail him.
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