Valmont (VMI) Earnings & Revenues Surpass Estimates in Q4

Valmont Industries, Inc.


VMI

registered profits of $35.8 million or $1.68 per share in fourth-quarter 2020, up from $32.5 million or $1.51 per share in the year-ago quarter. Barring one-time items, adjusted earnings were $2.20 per share for the reported quarter that beat the Zacks Consensus Estimate of $1.80.

Revenues in the quarter were $798.4 million, up 16.8% year over year. The figure also surpassed the Zacks Consensus Estimate of $726 million.

Segment Highlights

Infrastructure-Related

Sales in the Engineered Support Structures segment were flat year over year at $256.1 million. Per the company, lower volumes in international markets were offset by favorable currency impacts and favorable pricing.

Sales in the Utility Support Structures segment rose 16.9% year over year to $271 million. The upside was driven by higher volumes resulting from strategic capacity additions in existing North American operations and increased sales of global generation products.

Sales in the Coatings segment were flat year over year at $89.3 million as benefits of higher internal and international volumes were offset by lower external volumes in North American markets due to pandemic-led disruptions.

Agriculture-Related

Sales in the Irrigation unit amounted to $199.3 million, up 49.8% year over year on higher volumes across all markets. This was partly offset by unfavourable currency impacts. Sales in North America were $97.1 million, up 14.8% year over year led by higher volumes across all irrigation product lines.

International irrigation sales more than doubled year over year to $102.2 million.

FY20 Results

Earnings (as reported) for full-year 2020 were $6.57 per share compared with earnings of $6.73 per share a year ago. Net sales rose 4.6% year over year to around $2,895 million.

Financial Position

Valmont ended 2020 with cash and cash equivalents of $400.7 million, up 13.3% year over year. Long-term debt stood at $728.4 million, down 4.8% year over year.

Cash flows from operating activities were $316.3 million for the year (as of Dec 26, 2020), up from $307.6 million for the same period a year ago (as of Dec 28, 2019).

Outlook

Valmont expects net sales of $740-$765 million for first-quarter 2021. It also expects operating profit margins of 9-10% for the first quarter.

Valmont also anticipates revenues from the Irrigation segment to increase around 50-56% year over year to $235-$245 million for the first quarter.

For full-year 2021, it expects an increase in net sales of 9-14% and an increase in irrigation segment revenues of 27-30% year over year. The company also expects earnings of $9.00-$9.70 per share for 2021.

Price Performance

The company’s shares have gained 66.7% in the past year compared with 2.4% rise of the

industry

.

Zacks Rank & Other Key Picks

Valmont currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are

Fortescue Metals Group Limited


FSUGY

,

BHP Group


BHP

and

Impala Platinum Holdings Limited


IMPUY

.

Fortescue has a projected earnings growth rate of 78.4% for the current fiscal. The company’s shares have surged around 160% in a year. It currently carries a Zacks Rank #2. You can see


the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BHP has an expected earnings growth rate of 62.3% for the current fiscal. The company’s shares have gained around 49.8% in the past year. It currently holds a Zacks Rank #2.

Impala has an expected earnings growth rate of 195.9% for the current fiscal. The company’s shares have rallied around 48.3% in the past year. It currently sports a Zacks Rank #1.

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