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Why Is Valmont Industries (VMI) Down 5.4% Since Its Last Earnings Report?
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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 5.4% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is VMI 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 and Revenues Miss Estimates
Valmont 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 segments in the quarter.
Full-Year 2017 Results
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.
Segment Review
Infrastructure-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.
Agriculture-Related
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.
Financial Position
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.
Outlook
Valmont expects adjusted earnings for 2018 to be around $8.00 per share. This does not 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, VMI has a subpar Growth Score of D and a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
VMI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Valmont Industries (VMI) Down 5.4% Since Its Last Earnings Report?
A month has gone by since the last earnings report for Valmont Industries, Inc. (VMI - Free Report) . Shares have lost about 5.4% in that time frame.
Will the recent negative trend continue leading up to its next earnings release, or is VMI 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 and Revenues Miss Estimates
Valmont 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 segments in the quarter.
Full-Year 2017 Results
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.
Segment Review
Infrastructure-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.
Agriculture-Related
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.
Financial Position
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.
Outlook
Valmont expects adjusted earnings for 2018 to be around $8.00 per share. This does not 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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Valmont Industries, Inc. Price and Consensus
Valmont Industries, Inc. Price and Consensus | Valmont Industries, Inc. Quote
VGM Scores
At this time, VMI has a subpar Growth Score of D and a grade with the same score on the momentum front. 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
VMI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.