It has been about a month since the last earnings report for Valmont Industries (VMI Quick QuoteVMI - Free Report) . Shares have added about 14.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Valmont due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Valmont’s Earnings & Revenues Surpass Estimates in Q2

Valmont registered profits of $76.1 million or $3.53 per share in second-quarter 2022, up from $62.1 million or $2.89 per share in the year-ago quarter.

Barring one-time items, adjusted earnings were $3.70 per share in the reported quarter, beating the Zacks Consensus Estimate of $3.29.

Revenues in the quarter were $1,135.5 million, up 26.9% year over year. The figure surpassed the Zacks Consensus Estimate of $992.1 million.  Sales were driven by favorable pricing and higher volumes.

Segment Highlights

Sales in the Infrastructure segment increased 23.9% year over year to $765 million in the reported quarter. This upside was backed by favorable pricing globally and increased volumes, especially for renewable energy, telecommunication and Transmission, Distribution and Substation products.

Sales in the Agriculture segment rose 34% year over year to $377.8 million. The uptick was driven by increased average selling prices of irrigation equipment globally and higher volumes, especially in North America and Brazil.

Financial Position

Valmont ended the second quarter with cash and cash equivalents of $154.6 million, down 22.4% year over year. Long-term debt stood at around $995.6 million, up 15.6% year over year.

Cash flows from operating activities were $68 million for 26 weeks ended Jun 25, 2022, down from $70.2 million for the same period a year ago (as of Jun 26, 2021).

The company returned $21.5 million to shareholders through dividends and share buybacks during the quarter.

Outlook

Valmont revised its outlook for 2022. It expects net sales growth for 2022 in the range of 20-21% year over year, up from 11-17% expected earlier. The company expects earnings per share (EPS) in the range of $12.90-$13.30 for the year, up from $12.30-$12.80 expected earlier. Adjusted EPS are now projected in the band of $13.60-$14, up from the prior forecast of $13-$13.50.

Valmont projects capital expenditures in the range of $110-$120 million for 2022.

The company raised its outlook due to strong first-half results and several other positive drivers. These include a record backlog of $2 billion, reflecting continued strong, global market drivers across its businesses.

The company is well positioned to drive sustainable, profitable growth and deliver long-term value to its shareholders.

 

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

The consensus estimate has shifted 7.67% due to these changes.

VGM Scores

Currently, Valmont has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Valmont has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.