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Valmont's (VMI) Q3 Earnings Miss Estimates, Revenues Beat
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Valmont Industries, Inc. (VMI - Free Report) logged a profit (as reported) of roughly $35.2 million or $1.55 per share in third-quarter 2017, up 25% from net earnings of around $28.2 million or $1.24 recorded a year ago. Adjusted earnings for the quarter were $1.56 per share, missing the Zacks Consensus Estimate of $1.62.
Net sales for the quarter were $680.8 million, up 11.6% year over year. The figure surpassed the Zacks Consensus Estimate of $655 million. Revenues rose across all segments except Energy & Mining.
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 $221.5 million for the reported quarter were 9% higher than the prior-year quarter, courtesy of increased highway safety sales in Australia where road development activity improved. Lighting sales fell in North America while it increased in Europe owing to stable market conditions.
Utility Support Structures: Sales rose 19% year over year to $179.8 million owing to increased pricing as a result of higher steel costs. The ongoing expansion of the North American grid to improve its reliability and capacity also provided an impetus.
Coatings: This segment recorded net sales growth of 18% year over year to $82.6 million. In the Asia-Pacific region, the growth of sales can be attributed to improved volume and pricing owing to the market recovery. Sales in North America improved due to increased pricing and strong domestic demand.
Energy and Mining: Net sales slightly fell to $79.8 million from the prior year quarter as increase in sales of access systems were offset by declines in mining consumables and offshore construction.
Agriculture-Related
Irrigation: The segment reported net sales of $147.4 million, up 15% year over year driven by broad-based demand in international markets. Sales in the North American were modestly higher.
Financial Position
Valmont ended third-quarter 2017 with a cash balance of $493.5 million, up roughly 41.2% year over year. Long-term debt at the end of the quarter was $754.2 million, down around 0.2% year over year.
Outlook
Valmont now expects earnings for 2017 to be in the range of $6.90-$7.04 per share factoring in the impact of hurricanes. Favorable Utility Support and Engineered Support Structures sales are expected to drive revenues in the fourth quarter.
Price Performance
Valmont’s shares have gained around 6.3% over the last six months as against the industry’s 10.2% decline.
China National Materials Group has an expected long-term earnings growth rate of 20%.
Hitachi Construction has an expected long-term earnings growth rate of 16.2%.
Komatsu has an expected earnings growth of 16.2% for the current year.
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Valmont's (VMI) Q3 Earnings Miss Estimates, Revenues Beat
Valmont Industries, Inc. (VMI - Free Report) logged a profit (as reported) of roughly $35.2 million or $1.55 per share in third-quarter 2017, up 25% from net earnings of around $28.2 million or $1.24 recorded a year ago. Adjusted earnings for the quarter were $1.56 per share, missing the Zacks Consensus Estimate of $1.62.
Net sales for the quarter were $680.8 million, up 11.6% year over year. The figure surpassed the Zacks Consensus Estimate of $655 million. Revenues rose across all segments except Energy & Mining.
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 $221.5 million for the reported quarter were 9% higher than the prior-year quarter, courtesy of increased highway safety sales in Australia where road development activity improved. Lighting sales fell in North America while it increased in Europe owing to stable market conditions.
Utility Support Structures: Sales rose 19% year over year to $179.8 million owing to increased pricing as a result of higher steel costs. The ongoing expansion of the North American grid to improve its reliability and capacity also provided an impetus.
Coatings: This segment recorded net sales growth of 18% year over year to $82.6 million. In the Asia-Pacific region, the growth of sales can be attributed to improved volume and pricing owing to the market recovery. Sales in North America improved due to increased pricing and strong domestic demand.
Energy and Mining: Net sales slightly fell to $79.8 million from the prior year quarter as increase in sales of access systems were offset by declines in mining consumables and offshore construction.
Agriculture-Related
Irrigation: The segment reported net sales of $147.4 million, up 15% year over year driven by broad-based demand in international markets. Sales in the North American were modestly higher.
Financial Position
Valmont ended third-quarter 2017 with a cash balance of $493.5 million, up roughly 41.2% year over year. Long-term debt at the end of the quarter was $754.2 million, down around 0.2% year over year.
Outlook
Valmont now expects earnings for 2017 to be in the range of $6.90-$7.04 per share factoring in the impact of hurricanes. Favorable Utility Support and Engineered Support Structures sales are expected to drive revenues in the fourth quarter.
Price Performance
Valmont’s shares have gained around 6.3% over the last six months as against the industry’s 10.2% decline.
Zacks Rank & Other Stocks to Consider
Valmont currently carries a Zacks Rank #2 (Buy).
Other top-ranked companies in the industrial product space are China National Materials Group Corp. , Hitachi Construction Machinery Co., Ltd. (HTCMY - Free Report) and Komatsu Ltd. (KMTUY - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
China National Materials Group has an expected long-term earnings growth rate of 20%.
Hitachi Construction has an expected long-term earnings growth rate of 16.2%.
Komatsu has an expected earnings growth of 16.2% for the current year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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