Valmont Industries, Inc. (VMI Quick QuoteVMI - Free Report) reported a loss of roughly $3.6 million or 16 cents per share in fourth-quarter 2017, against net earnings of around $70.1 million or $3.10 recorded a year ago. Adjusted earnings for the quarter were $1.67 per share, falling short of the Zacks Consensus Estimate of $1.68.

 

Net sales for the quarter were $715 million, up 6% year over year. The figure lagged the Zacks Consensus Estimate of $716.5 million. Revenues rose across all segmentsin the quarter.

 

 

For 2017, the company reported profits of $116.2 million or $5.11 per share, down 32.9% from $173.2 million or $7.63 a year ago. Adjusted earnings for 2017 were $6.97 per share, up 8.6% from $6.42 reported in 2016.

 

Valmont generated revenues of $2.7 billion in 2017, up around 8.9% from $2.5 billion in 2016.

 

 

 

Broadly, the Omaha, NE-based company classifies its business segments as infrastructure- and agriculture-related.

 

 

Engineered Support Structures: The segment’s sales of $250.1 million were 2.4% higher than the prior-year quarter owing to higher highway safety product sales in Australia, partly neutralized by lower sales of lighting, traffic and wireless communication structures globally.

 

Utility Support Structures: Sales rose 14% year over year to $243.4 million on the back of continued strong demand in North America and price recovery of higher steel costs. 

 

Coatings: This segment recorded year over year net sales growth of 10% to $83 million. This was mainly driven by increased sales to other Valmont segments, improving market conditions in Australia and pricing to recover higher zinc cost.

 

 

Irrigation: The segment reported net sales of $149.5 million, up 9% year over year due to project activity and demand in key overseas markets. Sales in the North America were comparable year over year.

 

 

Valmont ended fourth-quarter 2017 with cash balance of $492.8 million, up roughly 23.2% year over year. Long-term debt at the end of the quarter was $753.9 million, down around 0.1% year over year.

 

 

Valmont expects adjusted earnings for 2018 to be around $8.00 per share. This doesnot include any the impacts of the 2018 Restructuring Plan and any impacts from the sale of the grinding media business or potential acquisitions. 

 

The company expects revenues to grow 7% in 2018(barring the impact of grinding media business sale and potential acquisitions). Raw material cost inflation is likely to continue throughout the year which will be offset by pricing actions, cost reductions, and productivity improvements. Foreign currency translation might have a favorable impact. 

 

The company expects to witness modest growth for the Engineered Support Structures and Coatings segments while continued good market conditions support a favorable outlook for the utility business. As for the irrigation segment, growth is anticipated on the back of international markets with modest growth in North America.

 

 

Valmont’s shares have lost around 8.8% over the last three months, underperforming the industry’s 6.1% gain.

 

 

 

 

 

Valmont currently carries a Zacks Rank #3 (Hold).

 

Some better-ranked stocks in the basic materials space are Methanex Corporation (MEOH Quick QuoteMEOH - Free Report) , LyondellBasell Industries N.V. (LYB Quick QuoteLYB - Free Report) and The Chemours Company (CC Quick QuoteCC - Free Report) . 

 

Methanex has an expected long-term earnings growth rate of 15% and flaunts a Zacks Rank #1 (Strong Buy). Its shares have gained 12.1% over a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

LyondellBasell has an expected long-term earnings growth rate of 9% and sports a Zacks Rank #1. The company’s shares have rallied 19.9% in a year.

 

Chemours has an expected long-term earnings growth rate of 15.5% and carries a Zacks Rank #2 (Buy).  Its shares have surged 47.1% over a year.

 

 

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