Vulcan Materials Drops on Bevy of Bad News

After the final bell Wednesday, the Birmingham, Ala., company issued a press release entitled "Vulcan Materials to Enhance Financial Flexibility." It said that it will raise $500 million through the stock offering, which it will use to clean up its balance sheet, cutting its debt-to-equity ratio to 44% from 50%. As of the end of the first quarter in March, the company had total cash of nearly $60 million, and total debt of $3.5 billion.

"Today's actions will position Vulcan to participate more effectively in the nation's economic recovery," Vulcan chief Don James said in a statement.

Many investors had been hoping that the U.S. government's stimulus package would produce a boom of road building, lifting Vulcan's business in the process. But it appears that the government's infrastructure plan has moved away from massive new construction projects, instead focusing on repair, maintenance and efficiency. That would still help Vulcan, but perhaps not as much as some had hoped.

In midday trading Thursday, Vulcan shares were changing hands at $41.72, down 5%, or $2.25, on volume of 2.2 million shares, already eclipsing the daily average turnover of about 1.6 million.