) posted a profit of $64 million or $2.38 per share in the second
quarter of 2014, down roughly 28.6% from $89.6 million or $3.33 per
share in the year-ago quarter. Earnings per share were in line with
the Zacks Consensus Estimate.
Valmont, which is among the prominent steel-pipe and tube
companies along with
MRC Global Inc.
Mueller Water Products, Inc.
), registered revenues of $842.6 million in the quarter, down 4.1%
from $878.7 million in the year-ago quarter. The decrease was
mainly due to lower sales in the Utility Support Structures,
Coatings and Irrigation segments. Sales lagged the Zacks Consensus
Estimate of $860 million.
Valmont Industries, Inc - Quarterly EPS (BNRI)
Revenues from the Utility Support Structures segment declined 7%
year over year to $213 million in the reported quarter as a result
of a decline in North America. There was a decline in the
percentage of sales from big transmission projects.
Irrigation segment revenues declined 19% year over year to
$219.9 million in the quarter due to considerable sales decline in
the North American markets. Sales declined in North America due to
lower crop commodity prices, partly offset by increased
Revenues from the Engineered Infrastructure Products division
went up 21% year over year to $304.4 million. Sales were driven by
the DS-SM acquisition. Sales of lighting and traffic products in
North America increased modestly but were offset by reduction in
intercompany volumes to the Utility Support Structures Segment.
The Coatings segment's sales declined 9% to $85.2 million. The
decline was due to the impact of lower mining activity in
Australia. Sales in North America were modestly lower due to a slow
start to the quarter and lower intercompany irrigation and utility
Valmont exited the quarter with cash and cash equivalents of
$455.9 million, down 7% from $490.5 million in the year-ago
quarter. Long-term debt increased 1.4% year over year to $478.5
Looking ahead, Valmont expects acquisition and organic growth to
drive sales gains in the second half of 2014, for the Engineered
Infrastructure Products Segment.
For the Utility Support Structures Segment, the company expects
challenging market conditions to persist and result in unfavorable
profit comparisons for the balance of 2014. In order to bring down
costs and improve productivity, Valmont will consolidate the
operations of one small facility into a larger one during the third
quarter. This will result in one-time third quarter pre-tax charge
of $2.1 million, or roughly 5 cents per share.
In the Irrigation Segment, the company expects second-half demand
to reflect current crop yields.
The Coatings Segment's results are expected to be flat with 2013
Valmont forecasts its earnings for 2014 to be in the range of
$9.35 to $9.65 per share, assuming that irrigation will be
profitable in the second half of the year roughly at the same rate
as last year and also excludes the impact of any share
Valmont currently carries a Zacks Rank #5 (Strong Sell).
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