Depending on a company's specific spot in the building-materials mix, its management is either hanging onto slight earnings gains or praying for a quick end to the housing debacle. The powers that be at Houston-based U.S. Concrete
With the demand for its ready-mixed and precast concrete falling steadily throughout the past year, the company's final quarter involved a loss of $75.7 million, or $1.97 a share, versus a loss of $23.5 million and $0.62 a share in the final quarter of 2006. And even if you back out the company's goodwill write-down in the quarter, the proportions don't change much, coming in at earnings of a couple pennies for the most recent quarter, compared to nine cents a year earlier.
There were, however, a few positives in the company's quarter. For instance, with the ready-mix selling price actually increasing by 1.5% year over year, revenues were up about $1.5 million vs. the December 2006 quarter. Further, while the change was anything but earth-shattering, U.S. Concrete's long-term debt finished the quarter at a somewhat lower level than its year-end 2006 level.
The type of products produced really does matter meaningfully for building materials companies these days. For instance, Eagle Materials
Similarly, Martin Marietta Materials
Clearly, good fortunes for U.S. Concrete and the other companies are closely tied to an improved housing market and a stronger economy. But since neither is likely to materialize tomorrow or the next day, I'm inclined to take a pass on the company's shares for now.
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