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Valmont's (VMI) Q4 Earnings & Revenues Top Estimates
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Valmont Industries (VMI - Free Report) swung to a profit (on a reported basis) of roughly $70.1 million or $3.10 per share in fourth-quarter 2016 from a loss of around $30.6 million or $1.34 per share a year ago.
Barring one-time items (including restructuring costs), earnings came in at $1.61 per share for the reported quarter, up from $1.35 per share a year ago. The results topped the Zacks Consensus Estimate of $1.48.
Net sales for the quarter were $674.6 million, up 6% year over year, also beating the Zacks Consensus Estimate of $631.8 million. Revenues rose due to higher volumes across engineered support structures, utility support structures and energy and mining businesses.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
Broadly, the Omaha, NE-based company classifies its business segments as infrastructure- and agriculture-related.
Infrastructure-Related
Engineered Support Structures: The segment’s sales of $216.5 million for the reported quarter were 12% higher than the prior-year quarter, helped by improved wireless communication product sales in North America and Asia Pacific. Sales of lighting and traffic products were flat in North America. Lighting and traffic structure sales in Europe were flat year over year due to limited growth in infrastructure investment.
Utility Support Structure: Sales rose 8.5% year over year to $185.1 million, supported by increased volumes and pricing.
Coatings: This segment saw net sales of $75.5 million, flat year over year. Improved sales in Asia Pacific offset reduced sales in North America.
Energy and Mining: Net sales rose 12% to $87.9 million on gains across key product lines. Offshore wind structures and component sales offset sustained weak demand for oil and gas exploration structures.
Agriculture-Related
Irrigation: The segment reported net sales of $136.6 million, stable year over year. Sales fell modestly In North America while international sales improved on the back of a stronger Latin American market. Tubing sales were flat year over year.
Financial Position
Valmont ended 2016 with a cash balance of $399.9 million, up roughly 15% year over year. Long-term debt at the end of the year was $754.8 million, down around 0.3% year over year.
The company repurchased 441,000 shares for $53.8 million during 2016. The authorized buyback program still has a balance of $132 million.
Outlook
Valmont envisions revenues to increase around 5% without acquisitions in 2017. The company also expects earnings per share for 2017 to increase around 10% over 2016 adjusted earnings of $6.42 per share. Valmont also expects to meet or exceed its 10% return on invested capital and more than one-time free cash flow conversion targets.
Price Performance
Valmont has underperformed Zacks categorized Steel-Pipes and Tubes industry over the last three months. The company's shares have declined 2.1% in this period, while the industry saw a 5.4% gain.
U.S. Steel has an expected long-term growth of 8%.
Ternium has an expected long-term growth of 18.4%.
Methanex has an expected long-term growth of 15%.
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Valmont's (VMI) Q4 Earnings & Revenues Top Estimates
Valmont Industries (VMI - Free Report) swung to a profit (on a reported basis) of roughly $70.1 million or $3.10 per share in fourth-quarter 2016 from a loss of around $30.6 million or $1.34 per share a year ago.
Barring one-time items (including restructuring costs), earnings came in at $1.61 per share for the reported quarter, up from $1.35 per share a year ago. The results topped the Zacks Consensus Estimate of $1.48.
Net sales for the quarter were $674.6 million, up 6% year over year, also beating the Zacks Consensus Estimate of $631.8 million. Revenues rose due to higher volumes across engineered support structures, utility support structures and energy and mining businesses.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
Valmont Industries, Inc. Price, Consensus and EPS Surprise | Valmont Industries, Inc. Quote
Segment Review
Broadly, the Omaha, NE-based company classifies its business segments as infrastructure- and agriculture-related.
Infrastructure-Related
Engineered Support Structures: The segment’s sales of $216.5 million for the reported quarter were 12% higher than the prior-year quarter, helped by improved wireless communication product sales in North America and Asia Pacific. Sales of lighting and traffic products were flat in North America. Lighting and traffic structure sales in Europe were flat year over year due to limited growth in infrastructure investment.
Utility Support Structure: Sales rose 8.5% year over year to $185.1 million, supported by increased volumes and pricing.
Coatings: This segment saw net sales of $75.5 million, flat year over year. Improved sales in Asia Pacific offset reduced sales in North America.
Energy and Mining: Net sales rose 12% to $87.9 million on gains across key product lines. Offshore wind structures and component sales offset sustained weak demand for oil and gas exploration structures.
Agriculture-Related
Irrigation: The segment reported net sales of $136.6 million, stable year over year. Sales fell modestly In North America while international sales improved on the back of a stronger Latin American market. Tubing sales were flat year over year.
Financial Position
Valmont ended 2016 with a cash balance of $399.9 million, up roughly 15% year over year. Long-term debt at the end of the year was $754.8 million, down around 0.3% year over year.
The company repurchased 441,000 shares for $53.8 million during 2016. The authorized buyback program still has a balance of $132 million.
Outlook
Valmont envisions revenues to increase around 5% without acquisitions in 2017. The company also expects earnings per share for 2017 to increase around 10% over 2016 adjusted earnings of $6.42 per share. Valmont also expects to meet or exceed its 10% return on invested capital and more than one-time free cash flow conversion targets.
Price Performance
Valmont has underperformed Zacks categorized Steel-Pipes and Tubes industry over the last three months. The company's shares have declined 2.1% in this period, while the industry saw a 5.4% gain.
Zacks Rank & Key Picks
Valmont currently has a Zacks Rank #2 (Buy).
Other well-placed companies in the basic materials space include United States Steel Corporation (X - Free Report) , Ternium S.A. (TX - Free Report) and Methanex Corporation (MEOH - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Steel has an expected long-term growth of 8%.
Ternium has an expected long-term growth of 18.4%.
Methanex has an expected long-term growth of 15%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>