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Valmont's (VMI) Q2 Earnings and Revenues Beat Estimates
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Valmont Industries (VMI - Free Report) delivered a profit of roughly $45.7 million or $2.01 per share in second-quarter 2017, up 9% from net earnings of around $42 million or $1.85 a year ago.Earnings for the reported quarter beat the Zacks Consensus Estimate of $1.93.
Net sales for the quarter were $712.7 million, up 11% year over year. The figure also surpassed the Zacks Consensus Estimate of $666.2 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 $217.6 million for the reported quarter were 7% higher than the prior-year quarter, helped by increased intersegment sales to the Utility Support Structures Segment and higher wireless communication product sales in North America. Lighting sales fell modestly in North America and Europe, partly offset by increase in the Asia-Pacific region.
Utility Support Structures: Sales rose 22% year over year to $184.6 million owing to volume increases and certain pricing tied to increased steel costs. The ongoing expansion of the North America grid to improve its reliability and capacity also acted as a supporting factor.
Coatings: This segment recorded net sales growth of 6%year over year to $79.8 million, on the back ofincreased activity in the Asia-Pacific region. Sales in North America improved due to the new facility in Texas and increased internal volumes to other segments, which partly offset reduced external demand.
Energy and Mining: Net sales fell 4% to $77.2 million due to a decline in sales of access systems. Expansion into markets outside of mining and energy has helped to lowerthe impact of lower demand from markets exposed to oil and gasthat weakened during the quarter.
Agriculture-Related
Irrigation: The segment reported net sales of $188.3 million, up 24% year over year. Sales in the North American market increased significantlydue to improved demand from markets outside the traditional corn-belt while international sales improved broadly on the back of a stronger Brazil market and project demand.
Financial Position
Valmont ended second-quarter 2017 with a cash balance of $448.2 million, up roughly 30.2% year over year. Long-term debt at the end of the quarter was $754.4 million, down around 0.3% year over year.
Outlook
The company reaffirmed its annual guidance for earnings that is expected to be slightly above $7 per share. Valmont anticipates strong demand in the utility market.
In Engineered Support Structures, the company expects improvement in the second half in response to moderating steel costs along with price recovery. Demand is anticipated to be stable in the coatings segment. The company continues to expect challenges in the Energy and Mining segment caused by difficult end market demand.
For the Irrigation segment, the company relies on its international presence to contribute to its second-half irrigation results. Valmont expects normal seasonality in the third quarter in North America while the fourth quarter will have to depend on crop prices and farmers’ sentiment post the growing season.
Price Performance
Valmont’s shares have rallied around 8.86% over the last six months, outperforming the Zacks categorized Steel-Pipes and Tubes industry’s 7.6% decline.
Ternium has expected long-term earnings growth rate of 18.4%.
POSCO has expected long-term earnings growth rate of 5%.
ArcelorMittal has expected earnings growth of 108.1% for the current year.
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Valmont's (VMI) Q2 Earnings and Revenues Beat Estimates
Valmont Industries (VMI - Free Report) delivered a profit of roughly $45.7 million or $2.01 per share in second-quarter 2017, up 9% from net earnings of around $42 million or $1.85 a year ago.Earnings for the reported quarter beat the Zacks Consensus Estimate of $1.93.
Net sales for the quarter were $712.7 million, up 11% year over year. The figure also surpassed the Zacks Consensus Estimate of $666.2 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 $217.6 million for the reported quarter were 7% higher than the prior-year quarter, helped by increased intersegment sales to the Utility Support Structures Segment and higher wireless communication product sales in North America. Lighting sales fell modestly in North America and Europe, partly offset by increase in the Asia-Pacific region.
Utility Support Structures: Sales rose 22% year over year to $184.6 million owing to volume increases and certain pricing tied to increased steel costs. The ongoing expansion of the North America grid to improve its reliability and capacity also acted as a supporting factor.
Coatings: This segment recorded net sales growth of 6%year over year to $79.8 million, on the back ofincreased activity in the Asia-Pacific region. Sales in North America improved due to the new facility in Texas and increased internal volumes to other segments, which partly offset reduced external demand.
Energy and Mining: Net sales fell 4% to $77.2 million due to a decline in sales of access systems. Expansion into markets outside of mining and energy has helped to lowerthe impact of lower demand from markets exposed to oil and gasthat weakened during the quarter.
Agriculture-Related
Irrigation: The segment reported net sales of $188.3 million, up 24% year over year. Sales in the North American market increased significantlydue to improved demand from markets outside the traditional corn-belt while international sales improved broadly on the back of a stronger Brazil market and project demand.
Financial Position
Valmont ended second-quarter 2017 with a cash balance of $448.2 million, up roughly 30.2% year over year. Long-term debt at the end of the quarter was $754.4 million, down around 0.3% year over year.
Outlook
The company reaffirmed its annual guidance for earnings that is expected to be slightly above $7 per share. Valmont anticipates strong demand in the utility market.
In Engineered Support Structures, the company expects improvement in the second half in response to moderating steel costs along with price recovery. Demand is anticipated to be stable in the coatings segment. The company continues to expect challenges in the Energy and Mining segment caused by difficult end market demand.
For the Irrigation segment, the company relies on its international presence to contribute to its second-half irrigation results. Valmont expects normal seasonality in the third quarter in North America while the fourth quarter will have to depend on crop prices and farmers’ sentiment post the growing season.
Price Performance
Valmont’s shares have rallied around 8.86% over the last six months, outperforming the Zacks categorized Steel-Pipes and Tubes industry’s 7.6% decline.
Zacks Rank &Other Stocks to Consider
Valmont currently carries a Zacks Rank #2 (Buy).
Other top-ranked companies in the steel space include Ternium S.A. (TX - Free Report) , POSCO (PKX - Free Report) and ArcelorMittal (MT - Free Report) . While both Ternium and POSCO sport a Zacks Rank #1 (Strong Buy), ArcelorMittal is a Zacks Rank #2 stock. You can see the complete list of today’s Zacks Rank #1 stocks here.
Ternium has expected long-term earnings growth rate of 18.4%.
POSCO has expected long-term earnings growth rate of 5%.
ArcelorMittal has expected earnings growth of 108.1% for the current year.
3 Top Picks to Ride the Hottest Tech Trend
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>