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Valmont (VMI) Q1 Earnings and Revenues Surpass Estimates

Valmont Industries, Inc. VMI reported a first-quarter 2023 profit of $74.5 million or $3.47 per share, up from $62.3 million or $2.90 per share in the year-ago quarter.

Barring one-time items, adjusted earnings per share were $3.61, up from $3.07 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.32.

The upside in earnings can be attributed to the company’s pricing growth across segments, operational efficiencies and strong end-market demand.

The company’s revenues were $1,062.5 million in the quarter, up 8.3% year over year. The upside in sales can be partly attributed to higher selling prices. The top line beat the Zacks Consensus Estimate of $1,021.6 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 first-quarter revenues increased 11.2% year over year to $736.1 million. This rise is driven by favorable pricing globally and higher volumes in the Lighting and Transportation (L&T) and solar product lines and contribution from the ConcealFab acquisition.

Revenues from the Agriculture segment totaled $332.2 million, increasing 8.3% year over year, aided by higher average selling prices of irrigation equipment globally. International sales were significantly higher, driven by a record first quarter in Brazil and higher sales in the Middle East.

Financials

VMI ended the quarter with cash and cash equivalents of $172.9 million, up 15.5% year over year. Long-term debt was $985.6 million, up 2.3%.

Valmont announced an additional $400 million share repurchase authorization with no expiration. It also bought back $111.1 million of company stock in the first quarter, with $370.3 million remaining on the share repurchase program.

The company also announced a 9% hike in its quarterly dividend to 60 cents per share from 55 cents.

Outlook

For 2023, Valmont anticipates net sales growth of 4-7% and adjusted EPS of $15.45-$16 (up from $15.35-$15.90 expected earlier). It also anticipates capital expenditures in the $105-$125 million range for 2023. For the year, the company expects high inflation, modest currency impact and raw material costs in sync with price projections.

Price Performance

VMI shares are up 15.5% in the past year compared with the industry’s rise of 3.9% over the same period.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank & Key Picks

VMI currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products space include Brady Corporation BRC, The Timken Company TKR and Cintas Corporation CTAS

Brady currently carries a Zacks Rank #1 (Strong Buy). Shares of BRC have gained 12.6% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.6% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Timken Company currently carries a Zacks Rank #2 (Buy). Shares of TKR have gained 32.1% in the past year. It topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 22.5% on average.

Cintas, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 13.7% for the current year. It topped the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 4.9%, on average. The stock has gained 12.1% over the past year.

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