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Valmont (VMI) Up 4.6% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have added about 4.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Valmont’s Earnings & Revenues Surpass Estimates in Q1
Valmont registered profits of $55 million or $2.57 per share in first-quarter 2021, up from $42.9 million or $1.99 per share in the year-ago quarter. Earnings per share in the reported quarter beat the Zacks Consensus Estimate of $2.12.
Revenues in the quarter were $774.9 million, up 14.9% year over year. The figure also surpassed the Zacks Consensus Estimate of $754.6 million.
Segment Highlights
Infrastructure-Related
Sales in the Engineered Support Structures segment fell 3.6% year over year to $222.3 million. Per the company, lower volumes in transportation markets were partly offset by favorable currency impacts, favorable pricing and higher sales of wireless communication products and components.
Sales in the Utility Support Structures segment rose 12.3% year over year to $253.1 million. The upside was driven by higher volumes resulting from higher demand for renewable energy generation and utilities’ investments in grid resiliency.
Sales in the Coatings segment increased 5.9% year over year at $93.3 million as benefits of favorable pricing and higher internal volumes were partly offset by lower external volumes in North American markets due to disruptions associated with the pandemic and winter weather.
Agriculture-Related
Sales in the Irrigation unit amounted to $229.7 million, up 46.5% year over year on higher volumes across most markets. This was partly offset by unfavorable currency impacts. Sales in North America were $122.8 million, up 15.2% year over year led by higher volumes across all irrigation product lines.
International irrigation sales more than doubled year over year to $106.9 million.
Financial Position
Valmont ended first-quarter 2021 with cash and cash equivalents of $391.5 million, up 32.9% year over year. Long-term debt stood at $729.6 million, almost flat year over year.
Cash flows from operating activities were $33.2 million at the end of the first quarter (as of Mar 27, 2021), down from $62.4 million for the same period a year ago (as of Mar 28, 2020).
Outlook
Valmont expects net sales of $805-$830 million for second-quarter 2021. It also expects operating profit margins of 9.5-10.5% for the second 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?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 9.7% due to these changes.
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 B. 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 these revisions 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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Valmont (VMI) Up 4.6% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have added about 4.6% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Valmont’s Earnings & Revenues Surpass Estimates in Q1
Valmont registered profits of $55 million or $2.57 per share in first-quarter 2021, up from $42.9 million or $1.99 per share in the year-ago quarter. Earnings per share in the reported quarter beat the Zacks Consensus Estimate of $2.12.
Revenues in the quarter were $774.9 million, up 14.9% year over year. The figure also surpassed the Zacks Consensus Estimate of $754.6 million.
Segment Highlights
Infrastructure-Related
Sales in the Engineered Support Structures segment fell 3.6% year over year to $222.3 million. Per the company, lower volumes in transportation markets were partly offset by favorable currency impacts, favorable pricing and higher sales of wireless communication products and components.
Sales in the Utility Support Structures segment rose 12.3% year over year to $253.1 million. The upside was driven by higher volumes resulting from higher demand for renewable energy generation and utilities’ investments in grid resiliency.
Sales in the Coatings segment increased 5.9% year over year at $93.3 million as benefits of favorable pricing and higher internal volumes were partly offset by lower external volumes in North American markets due to disruptions associated with the pandemic and winter weather.
Agriculture-Related
Sales in the Irrigation unit amounted to $229.7 million, up 46.5% year over year on higher volumes across most markets. This was partly offset by unfavorable currency impacts. Sales in North America were $122.8 million, up 15.2% year over year led by higher volumes across all irrigation product lines.
International irrigation sales more than doubled year over year to $106.9 million.
Financial Position
Valmont ended first-quarter 2021 with cash and cash equivalents of $391.5 million, up 32.9% year over year. Long-term debt stood at $729.6 million, almost flat year over year.
Cash flows from operating activities were $33.2 million at the end of the first quarter (as of Mar 27, 2021), down from $62.4 million for the same period a year ago (as of Mar 28, 2020).
Outlook
Valmont expects net sales of $805-$830 million for second-quarter 2021. It also expects operating profit margins of 9.5-10.5% for the second 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?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 9.7% due to these changes.
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 B. 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 these revisions 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.