Vulcan Materials Q3 2026: shipments fell 3% as diesel ate price gains; EBITDA outlook cut to ~$2.4B

Vulcan Materials, the largest US producer of crushed stone, sand and gravel ("aggregates"), had a flat-to-down third quarter in 2026. Revenue fell 4.7% to $2,184.6 million and diluted EPS from continuing operations slipped 0.7% to $2.81. Aggregates shipments fell 3% against a strong, weather-helped quarter a year ago. Prices rose 3.8% a ton, but a diesel-driven 7% rise in cash cost per ton absorbed almost all of it. Management now expects "approximately $2.4 billion" of Adjusted EBITDA for 2026, the bottom of the $2.4–2.6 billion range it reaffirmed in July.

The quarter in numbers

Operating margin is operating earnings as a share of revenue: what is left after running the business, before interest and tax. The "freight-adjusted" price leaves out delivery charges that Vulcan passes on to customers at cost, so it measures what Vulcan earns for the stone itself. Cash gross profit per ton is gross profit plus depreciation and depletion (non-cash charges for wearing out equipment and using up quarry reserves), divided by tons shipped. It is the unit-profit figure Vulcan itself leads with. Adjusted EBITDA is earnings before interest, tax, depreciation and amortization, excluding items the company treats as one-offs.

Aggregates: lower volume, price only just ahead of cost

Aggregates produced $593.4 million of the $665.6 million total gross profit. Segment gross profit fell 3% ($18.7 million) while gross profit per ton was unchanged at $9.46. In other words, the entire decline came from selling 2.0 million fewer tons.

Volume. Shipments fell 3% to 62.7 million tons. The 10-Q blames the comparison: last year's third quarter "benefited from favorable weather across the Company's footprint following a slow start to the construction season." The filing does not say demand weakened in any end market, but it also does not point to any market that grew.

Price. The freight-adjusted price rose $0.83 to $22.84 a ton. On a mix-adjusted basis, which strips out the effect of selling more cheap or more expensive products and markets, prices rose 4.7%. Vulcan calls the increase "widespread growth across the Company's footprint."

Cost. Freight-adjusted cash cost of sales rose $0.72 (7%) to $10.89 a ton. Without higher diesel costs, it would have risen 3%. The 10-Q links the energy inflation to the Middle East conflict that began on February 28, 2026, which "has led to significant disruption of energy supplies and increases in global energy prices."

Freight-adjusted aggregates revenue rose only 1% ($8.0 million) to $1,431.7 million. The price increase added roughly $52 million and the lost volume took away roughly $44 million (our arithmetic from the per-ton figures).

Takeaway: Vulcan's pricing still works: a 4.7% mix-adjusted increase in a quarter with falling volume. But diesel took $0.72 of the $0.83 gain, so unit cash profit barely moved, and with 3% fewer tons, aggregates gross profit fell. That squeeze is why full-year guidance slid to the bottom of its range.

Asphalt and concrete: smaller by design

• Asphalt: revenue fell 8.4% to $381.2 million and gross profit fell 9% to $64.2 million. Tons shipped fell 10% to 3.9 million while the average price rose 3.4% to $85.49. The gross margin held at 17%, despite higher liquid asphalt costs. The prior-year quarter still included the Houston asphalt and construction business, sold in the fourth quarter of 2025.
• Concrete: revenue fell 61% to $92.4 million and cubic yards shipped fell 61%, because the California ready-mix operations were sold in early June. Gross profit fell 43% to $8.0 million and cash gross profit fell to $11.8 million from $30.6 million.

The revenue lost here mostly came with thin margins: concrete's $145.1 million revenue decline cost only $6.1 million of gross profit. That is why operating margin rose to 24.0% even as revenue fell.

What the headline numbers hide

EPS held up better than profit because of buybacks. Pre-tax earnings from continuing operations fell 3.6% to $471.2 million and net earnings attributable to Vulcan fell 3.4%. EPS fell only 0.7% because diluted shares dropped to 129.5 million from 132.9 million. Vulcan bought $350.0 million of stock in Q3 at an average $275.31 a share, after no repurchases in the third quarter of 2025, and $749.8 million so far this year. At last year's share count, EPS would have been about $2.74, down about 3%. Lower interest expense ($51.4 million vs $55.3 million) and an energy investment tax credit (effective tax rate 22.7% vs 23.0%) each added about a cent or two.

GAAP and adjusted EPS are almost the same. Adjusted EPS of $2.83 excludes only $0.03 of items: $2.3 million of charges tied to divested operations, $0.8 million of acquisition charges, a $0.5 million loss on sales, and a tax valuation allowance. There were no material one-offs in the quarter. For the nine months, the gap is wider ($6.76 adjusted vs $6.54), mainly from the second-quarter divestiture loss and $8.6 million of CEO-transition and reorganization charges.

Cash conversion weakened. Operating cash flow for the nine months was $971.0 million, 1.14 times net earnings of $853.3 million, down from $1,270.0 million and 1.54 times a year ago. The 10-Q attributes the $299.0 million drop to working capital ($203.4 million) and deferred income taxes ($109.2 million). Trade payables were $245.3 million at September 30, against $422.6 million a year earlier. Receivables are not the problem: gross receivables fell 6.7% from a year ago, and days sales outstanding (how long customers take to pay) were 43.3 against 42.4. Using the first-half figure in the Q2 10-Q ($584.6 million), third-quarter operating cash flow was about $386 million, against about $677 million in Q3 2025.

Shareholder returns ran ahead of free cash flow. Free cash flow (operating cash flow minus $548.0 million of capital spending) was about $423 million for the nine months, down from about $777 million. Vulcan returned $952.1 million in buybacks and dividends and spent $290.6 million on acquisitions. The gap was covered by $572.1 million of cash from selling the California and US Virgin Islands businesses and by $315.0 million of new commercial paper (short-term borrowing). Total debt rose to $4,680.6 million, 2.0 times trailing Adjusted EBITDA, up from 1.9 times at June 30. That is still inside Vulcan's 2.0–2.5 times target range, but at its bottom edge rather than below it.

On balance the quarter is flattered, mildly: profit before tax fell 3.6%, and a 2.6% smaller share count, paid for partly with divestiture proceeds and new debt, turned that into an EPS decline of just 0.7%.

Did last time's read hold up?

Our Q2 2026 report said the $2.4–2.6 billion EBITDA range was "achievable but not assured" and listed three things to watch in Q3. Volume did not recover; shipments fell 3%. Diesel did not ease; unit cash cost rose 7% again, the same $0.72 a ton as in Q2. Mix-adjusted price did hold around 4–5% (4.7%). We also said that if cash gross profit per ton gained no more than Q2's $0.14, the upper half of the range looked unlikely. It gained $0.11, and management has now guided to the low end. The read held up.

Acquisitions

Vulcan spent $290.6 million on acquisitions in the first nine months, about $216 million of it in the third quarter (our arithmetic from the $75.0 million reported at mid-year). The Q3 deals were two bolt-on aggregates operations in Tennessee and Kentucky, which the release says extend Vulcan's reach into southern Ohio. The 10-Q says none was material on its own or together.

Outlook

Management expects "approximately $2.4 billion in Adjusted EBITDA for the full year," the low end of the $2.4–2.6 billion range it gave in April and reaffirmed in July. It says energy inflation "has continued into the fourth quarter" and that it has taken "proactive pricing and cost actions." For 2027 it expects "another year of earnings growth," a continuation of current demand, and "mid- to high- single digit pricing gains" in aggregates.

Our view: even the lowered target asks a lot of the fourth quarter. Nine-month Adjusted EBITDA was $1,807.8 million, so $2.4 billion needs about $592 million in Q4, about 14% more than the roughly $518 million earned in Q4 2025 (trailing-twelve-month figure minus nine months). Q3 itself fell 3.9%. The acquisitions and the pricing actions add something, but Vulcan will need some volume growth or relief on diesel to get there. For 2027, mid- to high-single-digit pricing would be faster than this year's 4.7%. It only turns into higher unit profit if energy costs stop rising. Three things to watch in Q4:

1. Whether shipments grow again now that the weather comparison is easier.
2. Whether unit cash cost growth falls below 7% as diesel costs are passed on or ease.
3. Whether operating cash flow recovers. Paying for buybacks with short-term debt is sustainable only while leverage stays within 2.0–2.5 times.