Construction materials supplier Martin Marietta Materials (NYSE: MLM) missed Wall Street’s revenue expectations in Q3 CY2025, but sales rose 12.4% year on year to $1.85 billion. The company’s full-year revenue guidance of $6.16 billion at the midpoint came in 11.7% below analysts’ estimates. Its non-GAAP profit of $6.85 per share was 2.5% above analysts’ consensus estimates.

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Company Overview

Operating one of North America's largest networks of quarries, including 14 underground mines, Martin Marietta Materials (NYSE: MLM) is a natural resource-based building materials company that supplies aggregates, cement, and other construction materials for infrastructure and building projects.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Martin Marietta Materials’s sales grew at a mediocre 7.4% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Martin Marietta Materials’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

This quarter, Martin Marietta Materials’s revenue grew by 12.4% year on year to $1.85 billion but fell short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.4% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Martin Marietta Materials has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 21%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Martin Marietta Materials’s operating margin rose by 3.7 percentage points over the last five years, as its sales growth gave it operating leverage.

In Q3, Martin Marietta Materials generated an operating margin profit margin of 27.4%, up 2.6 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Martin Marietta Materials’s EPS grew at a remarkable 14% compounded annual growth rate over the last five years, higher than its 7.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Martin Marietta Materials’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Martin Marietta Materials’s operating margin expanded by 3.7 percentage points over the last five years. On top of that, its share count shrank by 3.2%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Martin Marietta Materials, its two-year annual EPS growth of 3.9% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q3, Martin Marietta Materials reported adjusted EPS of $6.85, up from $5.95 in the same quarter last year. This print beat analysts’ estimates by 2.5%. Over the next 12 months, Wall Street expects Martin Marietta Materials’s full-year EPS of $18.99 to grow 12.3%.

Key Takeaways from Martin Marietta Materials’s Q3 Results

It was encouraging to see Martin Marietta Materials beat analysts’ adjusted operating income expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock remained flat at $622.66 immediately after reporting.

Is Martin Marietta Materials an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.