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Valmont (VMI) Up 8.4% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have added about 8.4% 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 and Revenues Beat Estimates in Q3
Valmont registered profits of $51.65 million or $2.40 per share in third-quarter 2021, up from $39.34 million or $1.84 per share in the year-ago quarter.
Barring one-time items, adjusted earnings were $2.57 per share in the reported quarter, up from $1.99 logged in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of $2.43.
Revenues in the quarter were $868.8 million, up 18.4% year over year. The top line also surpassed the Zacks Consensus Estimate of $861.1 million. Sales growth in the quarter was led by robust sales in the Irrigation segment due to strong global agricultural market fundamentals driving positive farmer sentiment and deliveries of the large Egypt project that continued in the quarter.
Segment Highlights
Infrastructure-Related
Sales in the Engineered Support Structures segment increased 10% year over year to $281.1 million. Favorable pricing and increased sales of wireless communication products and components were the major growth drivers.
Sales in the Utility Support Structures segment rose roughly 1% year over year to $276.5 million. Significantly higher pricing and higher volumes in North American markets due to the ongoing investments in grid resiliency were mostly offset by reduced global sales that were primarily related to large projects in 2020 that were not repeated this year.
Sales in the Coatings segment increased 10% year over year to $96.7 million on the back of higher average selling prices and sales from the new green-field facility in Pittsburgh, PA that started operations earlier this year.
Agriculture-Related
Sales in the Irrigation unit amounted to $240.3 million, up 72.6% year over year on higher volumes across all markets, favorable pricing, and a rise in technology sales. Sales in North America were $116.3 million, up 53.4% year over year led by persistent strength in agricultural markets and higher industrial tubing sales.
International irrigation sales nearly doubled year over year to $124 million from $63.4 million. Ongoing deliveries of large projects in Egypt, strong demand in Brazil, and higher sales in Europe and Africa acted as tailwinds.
Financial Position
Valmont ended third-quarter 2021 with cash and cash equivalents of $170 million, down 61.4% year over year. Long-term debt was $897.5 million, increasing 15.1%.
Cash flows from operating activities were $61.8 million in the third quarter, down almost 77% year over year.
The company purchased $2.5 million of company stock in the reported quarter.
Outlook
The company has raised the bottom end of its full-year EPS guidance and has maintained the prior assumptions for the remainder of 2021. It now expects earnings of $10.10-$10.60, up from the prior range of $9.90-$10.60 per share. Adjusted earnings are now forecast to be $10.60-$11.10, up from $10.40-$11.10 expected earlier.
Net sales growth for the full year is now expected in the range of 17-18%, up from the previous range of 16-19% and irrigation segment sales growth is expected in the range of 50-53%, up from 45-50%. The revised guidance reflects strength in global agricultural markets, continued favorable end-market demand across all businesses and expected recovery of cost inflation.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Valmont has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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
Valmont has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Valmont (VMI) Up 8.4% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have added about 8.4% 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 and Revenues Beat Estimates in Q3
Valmont registered profits of $51.65 million or $2.40 per share in third-quarter 2021, up from $39.34 million or $1.84 per share in the year-ago quarter.
Barring one-time items, adjusted earnings were $2.57 per share in the reported quarter, up from $1.99 logged in the year-ago quarter. The bottom line topped the Zacks Consensus Estimate of $2.43.
Revenues in the quarter were $868.8 million, up 18.4% year over year. The top line also surpassed the Zacks Consensus Estimate of $861.1 million. Sales growth in the quarter was led by robust sales in the Irrigation segment due to strong global agricultural market fundamentals driving positive farmer sentiment and deliveries of the large Egypt project that continued in the quarter.
Segment Highlights
Infrastructure-Related
Sales in the Engineered Support Structures segment increased 10% year over year to $281.1 million. Favorable pricing and increased sales of wireless communication products and components were the major growth drivers.
Sales in the Utility Support Structures segment rose roughly 1% year over year to $276.5 million. Significantly higher pricing and higher volumes in North American markets due to the ongoing investments in grid resiliency were mostly offset by reduced global sales that were primarily related to large projects in 2020 that were not repeated this year.
Sales in the Coatings segment increased 10% year over year to $96.7 million on the back of higher average selling prices and sales from the new green-field facility in Pittsburgh, PA that started operations earlier this year.
Agriculture-Related
Sales in the Irrigation unit amounted to $240.3 million, up 72.6% year over year on higher volumes across all markets, favorable pricing, and a rise in technology sales.
Sales in North America were $116.3 million, up 53.4% year over year led by persistent strength in agricultural markets and higher industrial tubing sales.
International irrigation sales nearly doubled year over year to $124 million from $63.4 million. Ongoing deliveries of large projects in Egypt, strong demand in Brazil, and higher sales in Europe and Africa acted as tailwinds.
Financial Position
Valmont ended third-quarter 2021 with cash and cash equivalents of $170 million, down 61.4% year over year. Long-term debt was $897.5 million, increasing 15.1%.
Cash flows from operating activities were $61.8 million in the third quarter, down almost 77% year over year.
The company purchased $2.5 million of company stock in the reported quarter.
Outlook
The company has raised the bottom end of its full-year EPS guidance and has maintained the prior assumptions for the remainder of 2021. It now expects earnings of $10.10-$10.60, up from the prior range of $9.90-$10.60 per share. Adjusted earnings are now forecast to be $10.60-$11.10, up from $10.40-$11.10 expected earlier.
Net sales growth for the full year is now expected in the range of 17-18%, up from the previous range of 16-19% and irrigation segment sales growth is expected in the range of 50-53%, up from 45-50%. The revised guidance reflects strength in global agricultural markets, continued favorable end-market demand across all businesses and expected recovery of cost inflation.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
At this time, Valmont has a subpar Growth Score of D, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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
Valmont has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.