Martin Marietta Materials Inc. Reports Operating Results (10-Q)

Martin Marietta Materials Inc. (MLM, Financial) filed Quarterly Report for the period ended 2010-06-30.

Martin Marietta Materials Inc. has a market cap of $3.96 billion; its shares were traded at around $87.38 with a P/E ratio of 59.4 and P/S ratio of 2.3. The dividend yield of Martin Marietta Materials Inc. stocks is 1.8%. Martin Marietta Materials Inc. had an annual average earning growth of 7.7% over the past 10 years.MLM is in the portfolios of Tom Russo of Gardner Russo & Gardner, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Wallace Weitz of Weitz Wallace R & Co, RS Investment Management, Chris Davis of Davis Selected Advisers, Columbia Wanger of Columbia Wanger Asset Management, Pioneer Investments, John Keeley of Keeley Fund Management, Paul Tudor Jones of The Tudor Group, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

As an end use, infrastructure continues to represent over 55% of the Corporations Aggregates business and, as such, played a significant role in the Corporations second quarter results. During the second quarter of 2010, the Aggregates business experienced an 11% increase in aggregates volume in the infrastructure market over the comparable second quarter of 2009. As expected, many of the Corporations key states began spending funds from the American Recovery and Reinvestment Act (ARRA or Stimulus) in earnest during the quarter and aggregates volumes consumed on Stimulus projects increased 200% compared with the prior-year quarter. Even more notably, the infrastructure end use market, excluding shipments to Stimulus-funded projects, had volume growth of 6% due to state spending on delayed road maintenance projects. Further, volume growth of 10% in the Corporations nonresidential end-use market was driven by an increase in oilfield activity, as aggregates are essential to build oilfield roads and drilling pads. The nonresidential construction market, excluding shipments to the oilfield industry, had volume growth of 3.5%, partially as a result of contractors and project owners taking advantage of historically low construction prices. Residential and ChemRock/Rail had volume increases of 8% and 6%, respectively.

The Mideast Group and West Group each generated double-digit volume increases nearly 11% and 10%, respectively, in heritage aggregates product line shipments. Growth in the Mideast Group was fueled by Stimulus-funded jobs, as 40% of its increased volume was attributable to shipments to these projects. More specifically, the Corporations Indiana markets benefited significantly from this volume growth, reporting a 45% increase in heritage aggregates shipments for the second quarter 2010. The West Group benefited from both Stimulus-funded projects and the increased shipments to the oilfield industry.

Overall heritage aggregates product line pricing decreased 3.8% compared with the prior-year quarter. Consistent with recent trends, pricing varied significantly by market and ranged from an increase of 12% to a decrease of 14%. Competitive forces remain a challenge, particularly in markets that enjoyed strong residential and nonresidential construction activity during the previous economic cycle. These markets now often have an over-supply of contractors who have tended to bid aggressively on Stimulus-related projects, thereby reducing the competitiveness of the Corporations long-term customers. Management expects this pressure will ease as residential and nonresidential construction markets continue to either recover or reach levels of sustained stability. In addition to the competitive pressures, geographic mix is also an important factor relative to overall aggregates pricing. The Corporations top markets, in terms of volume recovery, for the second quarter 2010 Indiana, Arkansas and North Texas each have average selling prices less than the overall average for the Aggregates business.

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