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Why Is Valmont (VMI) Up 7.9% Since Last Earnings Report?
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A month has gone by since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Valmont due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Valmont’s Earnings & Revenues Surpass Estimates in Q4
Valmont registered profits of $35.8 million or $1.68 per share in fourth-quarter 2020, up from $32.5 million or $1.51 per share in the year-ago quarter. Barring one-time items, adjusted earnings were $2.20 per share for the reported quarter that beat the Zacks Consensus Estimate of $1.80.
Revenues in the quarter were $798.4 million, up 16.8% year over year. The figure also surpassed the Zacks Consensus Estimate of $726 million.
Segment Highlights
Infrastructure-Related
Sales in the Engineered Support Structures segment were flat year over year at $256.1 million. Per the company, lower volumes in international markets were offset by favorable currency impacts and favorable pricing.
Sales in the Utility Support Structures segment rose 16.9% year over year to $271 million. The upside was driven by higher volumes resulting from strategic capacity additions in existing North American operations and increased sales of global generation products.
Sales in the Coatings segment were flat year over year at $89.3 million as benefits of higher internal and international volumes were offset by lower external volumes in North American markets due to pandemic-led disruptions.
Agriculture-Related
Sales in the Irrigation unit amounted to $199.3 million, up 49.8% year over year on higher volumes across all markets. This was partly offset by unfavourable currency impacts. Sales in North America were $97.1 million, up 14.8% year over year led by higher volumes across all irrigation product lines.
International irrigation sales more than doubled year over year to $102.2 million.
FY20 Results
Earnings (as reported) for full-year 2020 were $6.57 per share compared with earnings of $6.73 per share a year ago. Net sales rose 4.6% year over year to around $2,895 million.
Financial Position
Valmont ended 2020 with cash and cash equivalents of $400.7 million, up 13.3% year over year. Long-term debt stood at $728.4 million, down 4.8% year over year.
Cash flows from operating activities were $316.3 million for the year (as of Dec 26, 2020), up from $307.6 million for the same period a year ago (as of Dec 28, 2019).
Outlook
Valmont expects net sales of $740-$765 million for first-quarter 2021. It also expects operating profit margins of 9-10% for the first quarter. Valmont also anticipates revenues from the Irrigation segment to increase around 50-56% year over year to $235-$245 million for the first quarter.
For full-year 2021, it expects an increase in net sales of 9-14% and an increase in irrigation segment revenues of 27-30% year over year. The company also expects earnings of $9.00-$9.70 per share for 2021.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Valmont has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Valmont has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Valmont (VMI) Up 7.9% Since Last Earnings Report?
A month has gone by since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have added about 7.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Valmont due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Valmont’s Earnings & Revenues Surpass Estimates in Q4
Valmont registered profits of $35.8 million or $1.68 per share in fourth-quarter 2020, up from $32.5 million or $1.51 per share in the year-ago quarter. Barring one-time items, adjusted earnings were $2.20 per share for the reported quarter that beat the Zacks Consensus Estimate of $1.80.
Revenues in the quarter were $798.4 million, up 16.8% year over year. The figure also surpassed the Zacks Consensus Estimate of $726 million.
Segment Highlights
Infrastructure-Related
Sales in the Engineered Support Structures segment were flat year over year at $256.1 million. Per the company, lower volumes in international markets were offset by favorable currency impacts and favorable pricing.
Sales in the Utility Support Structures segment rose 16.9% year over year to $271 million. The upside was driven by higher volumes resulting from strategic capacity additions in existing North American operations and increased sales of global generation products.
Sales in the Coatings segment were flat year over year at $89.3 million as benefits of higher internal and international volumes were offset by lower external volumes in North American markets due to pandemic-led disruptions.
Agriculture-Related
Sales in the Irrigation unit amounted to $199.3 million, up 49.8% year over year on higher volumes across all markets. This was partly offset by unfavourable currency impacts. Sales in North America were $97.1 million, up 14.8% year over year led by higher volumes across all irrigation product lines.
International irrigation sales more than doubled year over year to $102.2 million.
FY20 Results
Earnings (as reported) for full-year 2020 were $6.57 per share compared with earnings of $6.73 per share a year ago. Net sales rose 4.6% year over year to around $2,895 million.
Financial Position
Valmont ended 2020 with cash and cash equivalents of $400.7 million, up 13.3% year over year. Long-term debt stood at $728.4 million, down 4.8% year over year.
Cash flows from operating activities were $316.3 million for the year (as of Dec 26, 2020), up from $307.6 million for the same period a year ago (as of Dec 28, 2019).
Outlook
Valmont expects net sales of $740-$765 million for first-quarter 2021. It also expects operating profit margins of 9-10% for the first quarter. Valmont also anticipates revenues from the Irrigation segment to increase around 50-56% year over year to $235-$245 million for the first quarter.
For full-year 2021, it expects an increase in net sales of 9-14% and an increase in irrigation segment revenues of 27-30% year over year. The company also expects earnings of $9.00-$9.70 per share for 2021.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Valmont has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Valmont has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.