Martin Marietta Materials Chairman Stephen Zelnak Jr. cites three factors behind lower projected per share earnings for 2009: weaker and slower-than-expected economic recovery; marked decrease in transportation infrastructure spending from a decline in state revenues and a longer-than-expected delay in federal stimulus projects; and, an adverse weather-affected first half of the year.
We have expected our 2009 performance to be driven primarily by anticipated economic growth in the second half ÷ principally fueled by federal economic stimulus, or the American Recovery and Reinvestment Act. This program was designed to address job creation as well as the underlying demand in infrastructure repair and expansion together with industrial-related construction activity. While we have seen an increase in bidding activity for infrastructure projects and awarding of projects to successful bidders by a significant number of states, we now believe that 25 percent of projects will commence later in the year with most of the remainder coming in 2010.
Overall weak construction conditions, coupled with the slow flow of stimulus funds, has prompted the number two player in U.S. aggregate production to revise the range of projected 2009 earnings from a first-quarter outlook's $3.70-$4.15/share to $2.70-$3.30/share. Unlike the earlier earnings range, the current projection factors stimulus plan effects.