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Martin Marietta Materials (MLM) |
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WIKI ANALYSIS
Martin Marietta Materials (NYSE: MLM) is a producer of aggregates for the infrastructure, agricultural, nonresidential, and residential construction.[1]The company also produces other chemicals used in industrial, agricultural, and environmental applications.[2] The company is segmented into the Mideast Group, Southeast Group, and West Group, collectively the Aggregates business, and the Specialty Products segment. As a producer of aggregates, the company's revenues depend on the construction industry.[3]
Business Growth
Martin earned $97 million on 2010 revenues of $1.78 billion, versus $85 million on 2009 revenues $1.70 billion.[4] Growth depends on residential construction activity, which has the potential of growth. In addition, the price increases also resulted in revenue growth.
Trends & Forces
Martin's revenues depend heavily on new construction starts, aggregate sales
A majority of Martin's aggregate products are used in the construction industry, so the company's results depend in part on the strength of the construction industry.[5] The housing slump beginning in 2007 has negatively affected Martin's business as new home construction dropped, reducing the number of residential homes to be built (and supplied with aggregates).[6] While private residential construction is a small market for MLM, the severe downturn in activity hurts business.[7] In general, the ongoing economic slowdown is leading lower levels of construction activity. A prolonged period of slow construction activity has the potential of significant curtailing Martin's growth.[8]
Energy Prices Makes Operation and Transport More Costly
Martin requires a continued supply of diesel fuel, natural gas, coal, petroleum coke and other forms of energy for production. Increasing energy costs, then, negatively affect the production of Martin's aggregates.[9] As a result, the price of oil and other energy sources have a significant impact of the company's margin.[10]
Competition
Competitors
Of the more than 3,800 aggregate companies in the United States, the company estimates that the five largest aggregates producers control control 31% of the market.[11]Due to transportation costs, competition in the aggregates industry is limited by a company's proximity to its production facilities. Some of the largest competitors are as follows:
- La Farge North America
- Vulcan Materials Company (VMC)
- Texas Industries (TXI)
- Lehigh Hanson, Inc.
References
- ↑ Reuters.com: Company Profile for Martin Marietta
- ↑ Reuters.com: Company Profile for Martin Marietta
- ↑ Reuters.com: Company Profile for Martin Marietta
- ↑ Morningstar Financials for Martin Marietta
- ↑ Martin Marietta 2010 Annual report
- ↑ Martin Marietta 2010 Annual report
- ↑ Martin Marietta 2010 Annual report
- ↑ Martin Marietta 2010 Annual report
- ↑ Martin Marietta 2010 Annual report
- ↑ Martin Marietta 2010 Annual report
- ↑ SEC, Martin Marietta Materials 10-K, pg. 10
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