Despite weak demand in the commercial development sector, the 58-year-old, NYSE-traded company finished the quarter strongly, largely due to the sale of two land tracts no longer used in the firm's general operations. The after-tax gain from the two sales was $1.58 million.
Consolidated total sales for the quarter decreased 4.1% to $163.6 million from $170.6 million last year. Sales in the aggregates and concrete products segments were down.
The company's cement division showed the only revenue increase with $14.8 million of sales versus $13.7 million last year. The cement segment operating profit improved even more to $6 million from $4 million in fiscal 2002.
While aggregates revenue, excluding freight, decreased by about $1.3 million or 2.3%, aggregates operating profit was $14.3 million versus $9.1 million last year.
"In addition to land sale gains of $2.4 million, lower costs drove the increased earnings, even in the face of higher fuel costs," says Florida Rock president and CEO John Baker. He called the second quarter "a difficult operating environment."
For the near future, Baker says "strong home building continues to buoy up a very slow commercial construction scenario." He says low interest rates "remain the key to prolonging this strength."
Road building is "coming under the axe in many of the company's markets, though the strong backlog of work let to contract in Florida should offset the weaker state spending in Virginia and Maryland for the balance of the fiscal year," Baker says.
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