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Valmont's (VMI) Q1 Earnings Beat Estimates, Revenues Miss
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Valmont Industries, Inc. (VMI - Free Report) generated adjusted earnings per share (EPS) of $4.32 in first-quarter 2024, up from $3.47 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.24.
The company’s revenues were $977.8 million in the quarter, down 8% year over year. The top line missed the Zacks Consensus Estimate of $981.6 million.
The company managed to increase its profit margins year over year on lower sales through successful commercial strategies, enhanced operational efficiencies and lower SG&A expenses resulting from strategic cost-saving measures implemented in late 2023.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
The Infrastructure segment’s first-quarter revenues dropped 1.7% year over year to $723.6 million. The figure missed our estimate of $733.1 million. Increased volumes in the Transmission, Distribution and Substation and Solar product lines were driven by sustained high demand in the utility market and continued global investment in the energy transition. While these volume gains and favorable pricing across the portfolio were positive, they were more than offset by a substantial drop in Telecommunications volume.
Revenues in the Agriculture segment totaled $258.7 million, down 22.1% year over year. The figure missed our estimate of $261.4 million. In North America, irrigation equipment volumes declined because the company had the advantage of fulfilling a significant backlog of orders in first-quarter 2023. Average selling prices for irrigation were slightly lower from the year-ago period’s levels.
Financials
The company generated $23.3 million in operating cash flows during the quarter. As of the end of the quarter, cash and cash equivalents stood at $169.2 million. The company's long-term debt totaled $1,107.6 million in the quarter's end.
In the quarter, Valmont concluded its $120-million Accelerated Share Repurchase program, which had begun in the fourth quarter of 2023.
Outlook
For 2024, Valmont anticipates a net sales change of -2% to 0.5%. It expects EPS of $15.40-$16.40. It also anticipates capital expenditures in the $110-$125 million range. The effective tax rate is projected to be around 26%.
Price Performance
VMI’s shares are down 13.8% in the past year compared with the industry’s rise of 2.7% over the same period.
The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days.
L.B. Foster is slated to report first-quarter results on May 7. The consensus estimate for FSTR’s first-quarter earnings is pegged at a loss of 16 cents. The company’s shares have surged 120.1% in the past year.
AVD is expected to report first-quarter results on May 14. The consensus estimate for AVD’s first-quarter earnings is pegged at 8 cents per share, indicating a year-over-year rise of 14.3%.
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Valmont's (VMI) Q1 Earnings Beat Estimates, Revenues Miss
Valmont Industries, Inc. (VMI - Free Report) generated adjusted earnings per share (EPS) of $4.32 in first-quarter 2024, up from $3.47 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.24.
The company’s revenues were $977.8 million in the quarter, down 8% year over year. The top line missed the Zacks Consensus Estimate of $981.6 million.
The company managed to increase its profit margins year over year on lower sales through successful commercial strategies, enhanced operational efficiencies and lower SG&A expenses resulting from strategic cost-saving measures implemented in late 2023.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
Valmont Industries, Inc. price-consensus-eps-surprise-chart | Valmont Industries, Inc. Quote
Segment Review
The Infrastructure segment’s first-quarter revenues dropped 1.7% year over year to $723.6 million. The figure missed our estimate of $733.1 million. Increased volumes in the Transmission, Distribution and Substation and Solar product lines were driven by sustained high demand in the utility market and continued global investment in the energy transition. While these volume gains and favorable pricing across the portfolio were positive, they were more than offset by a substantial drop in Telecommunications volume.
Revenues in the Agriculture segment totaled $258.7 million, down 22.1% year over year. The figure missed our estimate of $261.4 million. In North America, irrigation equipment volumes declined because the company had the advantage of fulfilling a significant backlog of orders in first-quarter 2023. Average selling prices for irrigation were slightly lower from the year-ago period’s levels.
Financials
The company generated $23.3 million in operating cash flows during the quarter. As of the end of the quarter, cash and cash equivalents stood at $169.2 million. The company's long-term debt totaled $1,107.6 million in the quarter's end.
In the quarter, Valmont concluded its $120-million Accelerated Share Repurchase program, which had begun in the fourth quarter of 2023.
Outlook
For 2024, Valmont anticipates a net sales change of -2% to 0.5%. It expects EPS of $15.40-$16.40. It also anticipates capital expenditures in the $110-$125 million range. The effective tax rate is projected to be around 26%.
Price Performance
VMI’s shares are down 13.8% in the past year compared with the industry’s rise of 2.7% over the same period.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Valmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Gold Fields Limited (GFI - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and L.B. Foster Company (FSTR - Free Report) and American Vanguard Corporation (AVD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for GFI’s first-quarter earnings is pegged at 22 cents per share. The Zacks Consensus Estimate for GFI’s first-quarter earnings has been stable in the past 60 days.
L.B. Foster is slated to report first-quarter results on May 7. The consensus estimate for FSTR’s first-quarter earnings is pegged at a loss of 16 cents. The company’s shares have surged 120.1% in the past year.
AVD is expected to report first-quarter results on May 14. The consensus estimate for AVD’s first-quarter earnings is pegged at 8 cents per share, indicating a year-over-year rise of 14.3%.