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Valmont (VMI) Down 5.4% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Valmont due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Valmont's Q2 Earnings Beat Estimates, Revenues Lag
Valmont 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.
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
Valmont 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Valmont has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Valmont has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Valmont (VMI) Down 5.4% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Valmont Industries (VMI - Free Report) . Shares have lost about 5.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Valmont due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Valmont's Q2 Earnings Beat Estimates, Revenues Lag
Valmont 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.
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
Valmont 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.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Valmont has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Valmont has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.