We are retaining our Outperform recommendation on
) based on its solid first-quarter 2012 results and upbeat outlook.
Earnings of $1.96 per share topped the Zacks Consensus Estimate of
$1.56. Profit more than doubled year-over-year on solid revenue
Revenues spiked roughly 26% year-over-year to $717.4 million
riding on strong growth in the Irrigation Segment. The
Nebraska-based company saw healthy growth across the board in the
quarter. Notably, revenues from its Irrigation and Utility Support
Structures divisions zoomed 30% and 52% year-over-year,
Moving ahead, management envisions a strong performance in 2012.
It expects utility demand to increase and the environment to remain
favorable for the Irrigation division.
Moreover, Valmont expects operating performance at the Coatings
segment to remain strong for the remainder of 2012. The Engineered
Infrastructure Products segment, while challenged by the soft
market conditions in Europe, is expected to be profitable this
year. Based on these factors, management bumped up its earnings
guidance for 2012 and now expects earnings per share to exceed
$8.00 compared with the earlier view of $7.30 to $7.60.
Valmont makes fabricated metal products, metal and concrete pole
and tower structures and mechanized irrigation systems in the U.S.
and abroad. It competes with
) among others.
Valmont 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
Valmont's Irrigation and Coatings segments are witnessing strong
momentum recently. In the Irrigation unit, improving North American
equipment demand is boosting net farm income. The company is also
poised to savor incremental opportunity in the utility market.
Besides, acquisitions will also support growth in 2012.
Our recommendation on the stock is in sync with a short-term
Zacks #1 Rank (Strong Buy).
LINDSAY CORP (LNN): Free Stock Analysis Report
VALMONT INDS (VMI): Free Stock Analysis Report
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