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Valmont's (VMI) Earnings Beat, Sales Trail Estimates in Q3
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Valmont Industries, Inc. (VMI - Free Report) reported profits of roughly $4.4 million or 20 cents per share in third-quarter 2018, down 87.5% from a profit of around $35.2 million or $1.55 a year ago. Adjusted earnings in the quarter were $1.82 per share, exceeding the Zacks Consensus Estimate of $1.80.
Net sales in the quarter totaled $678.7 million, modestly down year over year. The figure lagged the Zacks Consensus Estimate of $681 million. Meanwhile, revenues improved at the Engineered Support Structures, Utility Support Structures and Coatings segments.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
Engineered Support Structures segment sales of $251.5 million were up 2.1% from prior-year quarter owing to solid sales volume in the North America transportation market. The company saw higher sales of lighting and traffic products.
Utility Support Structures sales increased 6.6% year over year to $218.3 million.
Coatings segment recorded year-over-year net sales growth of 9.5% to $90.4 million. This was mainly driven by recovery of higher zinc costs through pricing and strong industrial demand in North America.
Agriculture-Related
Irrigation reported net sales of $140.2 million, down 4.9% year over year, dented by lower sales in international market compared with the previous year due to unfavorable currency translation and reduced volumes in emerging markets.
Financial Position
Valmont ended third-quarter 2018 with cash balance of $295.6 million, down roughly 40% year over year. Long-term debt at the end of the quarter was $736.2 million, down around 2.4%.
Outlook
The company now expects adjusted earnings per share in the range of $7.50-$7.65 and revenues in the band of $2.75-$2.80 billion.
Valmont expects fourth-quarter revenues to be in line with last year. At the Engineered Support Structures segment, sales growth is supported by strong economic demand. Volumes at the Utility segment are expected to decline owing to a less favorable product mix in North America and unfavorable comparisons in the offshore wind business. Coatings segment revenues are expected to be similar to last year. Irrigation segment sales are also expected to be comparable to last year.
Price Performance
Valmont has outperformed the industry it belongs to in the last three months. It’s shares have lost around 7.9% compared with the industry’s fall of 17.2%.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 37.9% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 36.3% in a year.
CF Industries has an expected long-term earnings growth rate of 6%. Its shares have risen 25.2% in a year.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
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Valmont's (VMI) Earnings Beat, Sales Trail Estimates in Q3
Valmont Industries, Inc. (VMI - Free Report) reported profits of roughly $4.4 million or 20 cents per share in third-quarter 2018, down 87.5% from a profit of around $35.2 million or $1.55 a year ago. Adjusted earnings in the quarter were $1.82 per share, exceeding the Zacks Consensus Estimate of $1.80.
Net sales in the quarter totaled $678.7 million, modestly down year over year. The figure lagged the Zacks Consensus Estimate of $681 million. Meanwhile, revenues improved at the Engineered Support Structures, Utility Support Structures and Coatings segments.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
Valmont Industries, Inc. Price, Consensus and EPS Surprise | Valmont Industries, Inc. Quote
Review of the Segments:
Infrastructure-Related
Engineered Support Structures segment sales of $251.5 million were up 2.1% from prior-year quarter owing to solid sales volume in the North America transportation market. The company saw higher sales of lighting and traffic products.
Utility Support Structures sales increased 6.6% year over year to $218.3 million.
Coatings segment recorded year-over-year net sales growth of 9.5% to $90.4 million. This was mainly driven by recovery of higher zinc costs through pricing and strong industrial demand in North America.
Agriculture-Related
Irrigation reported net sales of $140.2 million, down 4.9% year over year, dented by lower sales in international market compared with the previous year due to unfavorable currency translation and reduced volumes in emerging markets.
Financial Position
Valmont ended third-quarter 2018 with cash balance of $295.6 million, down roughly 40% year over year. Long-term debt at the end of the quarter was $736.2 million, down around 2.4%.
Outlook
The company now expects adjusted earnings per share in the range of $7.50-$7.65 and revenues in the band of $2.75-$2.80 billion.
Valmont expects fourth-quarter revenues to be in line with last year. At the Engineered Support Structures segment, sales growth is supported by strong economic demand. Volumes at the Utility segment are expected to decline owing to a less favorable product mix in North America and unfavorable comparisons in the offshore wind business. Coatings segment revenues are expected to be similar to last year. Irrigation segment sales are also expected to be comparable to last year.
Price Performance
Valmont has outperformed the industry it belongs to in the last three months. It’s shares have lost around 7.9% compared with the industry’s fall of 17.2%.
Zacks Rank & Stocks to Consider
Valmont currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the basic material space are KMG Chemicals, Inc. , Methanex Corporation (MEOH - Free Report) and CF Industries Holdings, Inc. (CF - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KMG Chemicals has an expected long-term earnings growth rate of 28.5%. Its shares have returned 37.9% in a year.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have rallied 36.3% in a year.
CF Industries has an expected long-term earnings growth rate of 6%. Its shares have risen 25.2% in a year.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
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