Vulcan Materials Down On Stock Offering, Dividend

NEW YORK (AP) — Vulcan Materials Co. fell Thursday, a day after the cement, asphalt and gravel supplier cut its dividend in half, announced plans to increase by about 10 percent its shares outstanding and forecast a weaker-than-expected profit.

Birmingham, Ala.-based Vulcan, which has about 110.6 million shares outstanding, said Tuesday it is publicly offering 11.5 million common shares for expected proceeds of about $500 million. Much of that will be used, along with other funds, to lower its $3.5 billion debt by about $700 million.

The company also said it expects full-year profit to range between 70 cents and $1 per share, well below the $1.13-per-share average estimate of analysts polled by Thomson Reuters.

Vulcan cited weak construction activity and wet weather for the modest forecast.

Standard & Poor's Ratings Services responded to the moves by maintaining its "BBB"/Stable" investment-grade rating on Vulcan's debt.

Sterne, Agee & Leech analyst Chase Jacobson said the dividend cut and equity offering plus reduced debt should enable Vulcan to break even this year, on a cash-flow basis.