We are maintaining our Outperform recommendation on
) following its strong second-quarter 2012 results. Earnings of
$2.24 per share topped the Zacks Consensus Estimate of $2.16.
Profit jumped 31% year over year on healthy revenue growth.
Revenues shot up 14.8% year over year to $767.3 million,
exceeding the Zacks Consensus Estimate of $764 million. The results
were boosted by a solid performance in the Nebraska-based company's
Utility Support Structures division. Revenues from the segment
cruised 55% year over year, buoyed by higher demand from electric
Valmont envisions the environment to remain favorable for the
Irrigation and Coatings segments. The company expects to post
double-digit earnings growth in 2012 despite the European
Valmont, which competes with
), makes fabricated metal products, metal and concrete pole and
tower structures and mechanized irrigation systems in the U.S. and
abroad. The company is witnessing significant strength in the
irrigation market. The outlook for irrigation equipment is healthy
while demand for Utility Support Structures is expected to rise.
Healthy order activity and a growing backlog support expectations
for a strong 2012.
Valmont's Irrigation and Coatings segments are witnessing strong
momentum recently. In the Irrigation segment, improving North
American equipment demand amid the ongoing drought conditions is
boosting sales and profitability.
The Coatings segment is benefiting from declining energy costs.
The company is also poised to savor incremental opportunity in the
utility market. The global transmission and distribution markets
are seen as major long-term growth opportunities. Acquisitions will
also support growth in 2012.
Valmont is increasing capacity to leverage the meaningful
opportunity in the North American utility market. Moreover, it
remains committed to returning value to its shareholders in the
form of regular dividend payouts.
However, the company's core Engineered Infrastructure Products
segment remains challenged by the soft market conditions in Europe.
Nevertheless, the passage of a two year highway bill and
improvement across the wireless communications and commercial
lighting markets represents positives for this business.
Our recommendation on the stock is in agreement with a
short-term Zacks #2 Rank (Buy).
LINDSAY CORP (LNN): Free Stock Analysis Report
VALMONT INDS (VMI): Free Stock Analysis Report
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