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Valmont (VMI) Down 3.2% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Valmont Industries, Inc. (VMI - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? 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 drivers.
Valmont's Q4 Earnings & Revenues Top Estimates
Valmont 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.
Segment Review
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate have trended downward during the past month. There has been two downward revisions for the current quarter compared to one upward.
At this time, Valmont Industries' stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also 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.
Based on our scores, the stock is equally suitable for value, growth, and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Valmont (VMI) Down 3.2% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Valmont Industries, Inc. (VMI - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? 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 drivers.
Valmont's Q4 Earnings & Revenues Top Estimates
Valmont 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.
Segment Review
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate have trended downward during the past month. There has been two downward revisions for the current quarter compared to one upward.
Valmont Industries, Inc. Price and Consensus
Valmont Industries, Inc. Price and Consensus | Valmont Industries, Inc. Quote
VGM Scores
At this time, Valmont Industries' stock has an average Growth Score of 'C', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated also 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.
Based on our scores, the stock is equally suitable for value, growth, and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.