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Valmont's (VMI) Q1 Earnings and Revenues Beat Estimates

Valmont Industries, Inc.VMI reported a profit of roughly $39.3 million or $1.72 per share in first-quarter 2018, up 0.7% from net earnings of around $39 million or $1.72 recorded a year ago. Adjusted earnings for the quarter were $1.87 per share, exceeding the Zacks Consensus Estimate of $1.79.

Net sales for the quarter were $698.7 million, up 9.6% year over year. The figure surpassed the Zacks Consensus Estimate of $682 million. Revenues rose across all segments in the quarter.

Valmont Industries, Inc. Price, Consensus and EPS Surprise

Valmont Industries, Inc. Price, Consensus and EPS Surprise | Valmont Industries, Inc. Quote

Segment Review

Broadly, the Omaha, NE-based company classifies its business segments as infrastructure- and agriculture-related.

Infrastructure-Related

Engineered Support Structures : The segment's sales of $225 million were 9.8% higher than the prior-year quarter owing to increased highway safety product sales in Australia, higher structures sales across North America and Europe, and favorable currency swings.

Utility Support Structures : Sales rose 4.8% year over year to $210 million on the back of utility investments in the North American grid to improve reliability and connectivity, and higher demand for renewable projects.

Coatings : This segment recorded year-over-year net sales growth of 15.5% to $84.9 million. This was mainly driven by improved external market demand from economic growth across all regions.

Agriculture-Related

Irrigation : The segment reported net sales of $188 million, up 12.4% year over year due to strong international sales and significant project business. Sales in the North America were comparable year over year.

Financial Position

Valmont ended first-quarter 2018 with cash balance of $479.7 million, up roughly 12.8% year over year. Long-term debt at the end of the quarter was $753.6 million, down around 0.1% year over year.

Outlook

The company has increased its adjusted earnings per share guidance to a range of roughly $8.00-$8.10 per share that includes $10 million of restructuring charges.

For 2018, Valmont sees signs of stronger economic growth in many regions that is expected to contribute to favorable sales across most of its businesses. Although continued weakness in the U.S. farm economy continue to prevail and the uncertainty surrounding tariffs affect customer demand, the company's diversified base will help mitigate these impacts.

Price Performance

Valmont's shares have lost around 8.4% over the last three months, underperforming the industry 's 24.4% gain.

Zacks Rank & Stocks to Consider

Valmont currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the industrial space are Deere & Company DE , H&E Equipment Services, Inc. HEES and Caterpillar Inc. CAT .

Deere & Company has an expected long-term earnings growth rate of 5.67% and sports a Zacks Rank #1 (Strong Buy). The company's shares have moved up 38.4% in a year. You can see the complete list of today's Zacks #1 Rank stocks here .

H&E Equipment Services has an expected long-term earnings growth rate of 14.4% and flaunts a Zacks Rank #1. Its shares have gained 71.8% over a year.

Caterpillar has an expected long-term earnings growth rate of 12% and carries a Zacks Rank #2 (Buy). Its shares have moved up 66.8% in a year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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