ATML Earnings Action

Specifics have been lacking, but the vague nature of an infrastructure plan has been overshadowed by the largesse of it – the next administration’s plan to embark on the largest public works spending program since the interstate highway system. Vulcan Materials Company (VMC) is a producer of construction aggregates and other construction materials in the U.S. and Mexico and stands to benefit from an increase in public works funding. Its share price has reacted in kind, rising from a Nov. 21 low of $39.45 to an astonishing intra-day high of $77.95 today. Not all of this exuberance is unjustified, but until a solid infrastructure plan materializes, the near term trade will likely favor the shorts as the news has been factored in to a great extent. Plus, the company is still saddled with debt incurred from its acquisition of Florida Rock and the underlying thesis that caused Vulcan to cut its outlook in November - lowering its full-year outlook to a range of between $2.25 and $2.45, down from its August forecast of earnings from operations of upwards of $3.25 per share, remains; the financial crisis has severely constrained the availability of credit and weakened construction activity that was already soft.