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Valmont's (VMI) Q2 Earnings Beat Estimates, Revenues Lag
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Valmont Industries, Inc. (VMI - Free Report) reported a second-quarter 2024 profit of roughly $99.7 million or $4.91 per share, up from $89.4 million or $4.21 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $4.76, beating the Zacks Consensus Estimate of $4.04.
The upside in earnings can be attributed to pricing actions, cost management and operational efficiencies.
The company’s revenues were $1,039.7 million in the quarter, down 0.6% year over year. The top line lagged the Zacks Consensus Estimate of $1,055 million.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
The infrastructure segment’s second-quarter revenues decreased 1% year over year to $760.4 million. It missed our estimate of $800.4 million. The Transmission, Distribution and Substation (Utility) product line saw slightly higher volumes. This quarter's sales growth was restrained by an increased mix of distribution and substation structures, as well as an unfavorable contractual pricing impact from steel index deflation.
Telecommunications volumes were significantly lower than the previous year due to softer market conditions. Solar volumes also declined due to project schedule. Pricing was beneficial for the segment, with steel index deflation offset by a favorable mix.
Agriculture segment revenues totaled $279.3 million, up 0.4% year over year. It beat our estimate of $249.3 million. Irrigation equipment volumes in North America jumped considerably, owing to a large increase in replacement sales caused by severe weather in the midwestern and southern United States.
Average irrigation selling prices were lower than the previous year owing to focused regional pricing initiatives. International revenues fell from last year. Sales in Brazil were notably down due to stabilizing backlog levels and decreased grain prices, which influenced growers' purchasing behavior. These reduced sales were somewhat offset by increased Middle Eastern project sales and the contribution from the HR Products purchase.
Financials
VMI ended the quarter with cash and cash equivalents of $163.1 million, down 2.4% year over year. Long-term debt was $1,017.5 million, up 6.8% year over year.
The company returned $27.1 million to shareholders through share repurchases and dividends, and lowered borrowings on the revolving credit facility by around $90 million.
Outlook
For 2024, Valmont now anticipates net sales to decline 1.5-3.5%. It has raised its EPS guidance to $16.50-$17.30. Infrastructure net sales growth is projected to be flat to 1.5%. The effective tax rate is expected to be roughly 26%. Foreign currency translation is predicted to have a minimal impact on net sales. Capital expenditures are now estimated to range between $95 million and $110 million to support strategic growth plans.
Price Performance
VMI shares have lost 3.9% in the past year compared with the industry’s decline of 8.5% over the same period.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
VMI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth a look in the basic materials space are Agnico Eagle Mines (AEM - Free Report) , Ero Copper Corp. (ERO - Free Report) and Kinross Gold Corporation (KGC - Free Report) .
Agnico Eagle is slated to report second-quarter results on Jul 31, after market close. The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 87 cents. AEM beat the consensus in the last four quarters, with the average earnings surprise being 16.5%. AEM currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ero Copper is slated to report second-quarter results on Aug 1, after market close. The Zacks Consensus Estimate for ERO’s second-quarter earnings is pegged at 24 cents. ERO currently carries a Zacks Rank #2.
Kinross will report results for the second quarter on Jul 31. The Zacks Consensus Estimate for Kinross's second-year earnings is pegged at 13 cents. KGC, a Zacks Rank #1 stock, beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 79.3% in the past year.
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Valmont's (VMI) Q2 Earnings Beat Estimates, Revenues Lag
Valmont Industries, Inc. (VMI - Free Report) reported a second-quarter 2024 profit of roughly $99.7 million or $4.91 per share, up from $89.4 million or $4.21 per share in the year-ago quarter.
Barring one-time items, adjusted earnings per share were $4.76, beating the Zacks Consensus Estimate of $4.04.
The upside in earnings can be attributed to pricing actions, cost management and operational efficiencies.
The company’s revenues were $1,039.7 million in the quarter, down 0.6% year over year. The top line lagged the Zacks Consensus Estimate of $1,055 million.
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 second-quarter revenues decreased 1% year over year to $760.4 million. It missed our estimate of $800.4 million. The Transmission, Distribution and Substation (Utility) product line saw slightly higher volumes. This quarter's sales growth was restrained by an increased mix of distribution and substation structures, as well as an unfavorable contractual pricing impact from steel index deflation.
Telecommunications volumes were significantly lower than the previous year due to softer market conditions. Solar volumes also declined due to project schedule. Pricing was beneficial for the segment, with steel index deflation offset by a favorable mix.
Agriculture segment revenues totaled $279.3 million, up 0.4% year over year. It beat our estimate of $249.3 million. Irrigation equipment volumes in North America jumped considerably, owing to a large increase in replacement sales caused by severe weather in the midwestern and southern United States.
Average irrigation selling prices were lower than the previous year owing to focused regional pricing initiatives. International revenues fell from last year. Sales in Brazil were notably down due to stabilizing backlog levels and decreased grain prices, which influenced growers' purchasing behavior. These reduced sales were somewhat offset by increased Middle Eastern project sales and the contribution from the HR Products purchase.
Financials
VMI ended the quarter with cash and cash equivalents of $163.1 million, down 2.4% year over year. Long-term debt was $1,017.5 million, up 6.8% year over year.
The company returned $27.1 million to shareholders through share repurchases and dividends, and lowered borrowings on the revolving credit facility by around $90 million.
Outlook
For 2024, Valmont now anticipates net sales to decline 1.5-3.5%. It has raised its EPS guidance to $16.50-$17.30. Infrastructure net sales growth is projected to be flat to 1.5%. The effective tax rate is expected to be roughly 26%. Foreign currency translation is predicted to have a minimal impact on net sales. Capital expenditures are now estimated to range between $95 million and $110 million to support strategic growth plans.
Price Performance
VMI shares have lost 3.9% in the past year compared with the industry’s decline of 8.5% over the same period.
Image Source: Zacks Investment Research
Zacks Rank & Other Key Picks
VMI currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks worth a look in the basic materials space are Agnico Eagle Mines (AEM - Free Report) , Ero Copper Corp. (ERO - Free Report) and Kinross Gold Corporation (KGC - Free Report) .
Agnico Eagle is slated to report second-quarter results on Jul 31, after market close. The Zacks Consensus Estimate for AEM’s second-quarter earnings is pegged at 87 cents. AEM beat the consensus in the last four quarters, with the average earnings surprise being 16.5%. AEM currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ero Copper is slated to report second-quarter results on Aug 1, after market close. The Zacks Consensus Estimate for ERO’s second-quarter earnings is pegged at 24 cents. ERO currently carries a Zacks Rank #2.
Kinross will report results for the second quarter on Jul 31. The Zacks Consensus Estimate for Kinross's second-year earnings is pegged at 13 cents. KGC, a Zacks Rank #1 stock, beat the consensus in the last four quarters, with the average earnings surprise being 46%. The stock has surged nearly 79.3% in the past year.