Valmont Industries Posts Third-Quarter Profit, Outperforming Estimates
Valmont Industries, Inc. (VMI) reported a profit of $83 million or $4.11 per share for the third quarter of 2024. This marks a significant improvement from a loss of $49 million or $2.34 per share during the same period last year. Adjusted earnings remain at $4.11, slightly down from $4.12 a year prior. The results exceeded the Zacks Consensus Estimate of $3.96.
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Revenues reached $1,020.2 million this quarter, reflecting a 2.9% decrease year over year. However, this figure surpassed the Zacks Consensus Estimate of $1,019.1 million.
Overview of Valmont’s Performance
Insights on Valmont Industries’ Price and Consensus
Valmont Industries, Inc. price-consensus-eps-surprise-chart | Valmont Industries, Inc. Quote
Review of Business Segments
In the infrastructure segment, revenues climbed 0.4% year over year, amounting to $756.4 million. This figure fell short of our estimate of $759.3 million. Sales growth in utility and telecommunications offset declines in Lighting, Transportation, and solar sales. Utility sales surged approximately 15%, aided by a favorable mix of projects and higher volumes of distribution and substation products. Telecommunications experienced increased volumes in response to growing carrier expenses in a stable North American environment.
The agriculture segment generated $263.8 million, an 11.1% decline from the previous year, yet this still exceeded our estimate of $261.8 million. International sales faced challenges, particularly in Brazil, where lower grain prices affected growers’ purchasing decisions. However, there was some revenue growth in the Europe, Middle East, and Africa (EMEA) region, along with contributions from the HR Products acquisition. In North America, volumes for irrigation equipment slightly decreased, though a rise in replacement sales due to severe weather earlier in the year mitigated this decline.
Valmont’s Financial Status
Operating cash flows were reported at $225.1 million. By the end of the third quarter, the company had $200.5 million in cash and cash equivalents. Valmont paid dividends totaling $12.1 million and repurchased $40.1 million of its shares, leaving $81 million available for future buybacks. Additionally, the firm reduced its borrowings on a revolving credit facility by approximately $120 million this quarter, which brings the total reduction year-to-date to about $210 million.
2024 Projections for Valmont
For 2024, Valmont forecasts a decline in net sales ranging from 1.5% to 3.5%. Earnings per share are anticipated to be between $16.50 and $17.30, while capital expenditures are expected to fall between $85 million and $95 million to support growth initiatives.
Stock Price Performance
Over the past year, VMI shares have risen by 28.2%, significantly outperforming the industry’s increase of 8.9% during the same timeframe.
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Valmont’s Zacks Rank and Noteworthy Picks
Currently, VMI holds a Zacks Rank of #2 (Buy).
In the basic materials sector, other notable stocks include IAMGOLD Corporation (IAG), Agnico Eagle Mines Limited (AEM), and Barrick Gold Corporation (GOLD).
IAMGOLD is scheduled to report its third-quarter results on Nov. 7, with a consensus estimate of 11 cents for earnings. IAG has outperformed the Zacks Consensus Estimate in three out of the last four quarters, reflecting an impressive average earnings surprise of 200%. It also carries a Zacks Rank #2.
Agnico Eagle is set to release its third-quarter results on Oct. 30. The current consensus estimate for AEM’s earnings stands at 96 cents, with the company having beaten expectations in all four previous quarters, producing an average earnings surprise of 15.7%. AEM holds a Zacks Rank #1.
Barrick Gold will report its results on Nov. 7, and its earnings consensus is projected at 35 cents. GOLD, which also carries a Zacks Rank #2, has consistently exceeded consensus estimates in its last four quarters, achieving an average earnings surprise of 21.1%.
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Valmont Industries, Inc. (VMI): Free Stock Analysis Report
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