Yahoo Finance Why Is Valmont (VMI) Up 3% Since Last Earnings Report?
It has been about a month since the last earnings report for Valmont Industries (VMI). Shares have added about 3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Valmont due for a pullback? 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 Q1 Earnings Beat Estimates, Revenues Miss
Valmont Industries generated adjusted earnings per share (EPS) of $4.32 in first-quarter 2024, up from $3.47 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.24.
The company’s revenues were $977.8 million in the quarter, down 8% year over year. The top line missed the Zacks Consensus Estimate of $981.6 million.
The company managed to increase its profit margins year over year on lower sales through successful commercial strategies, enhanced operational efficiencies and lower SG&A expenses resulting from strategic cost-saving measures implemented in late 2023.
Segment Review
The Infrastructure segment’s first-quarter revenues dropped 1.7% year over year to $723.6 million. The figure missed our estimate of $733.1 million. Increased volumes in the Transmission, Distribution and Substation and Solar product lines were driven by sustained high demand in the utility market and continued global investment in the energy transition. While these volume gains and favorable pricing across the portfolio were positive, they were more than offset by a substantial drop in Telecommunications volume.
Revenues in the Agriculture segment totaled $258.7 million, down 22.1% year over year. The figure missed our estimate of $261.4 million. In North America, irrigation equipment volumes declined because the company had the advantage of fulfilling a significant backlog of orders in first-quarter 2023. Average selling prices for irrigation were slightly lower from the year-ago period’s levels.
Financials
The company generated $23.3 million in operating cash flows during the quarter. As of the end of the quarter, cash and cash equivalents stood at $169.2 million. The company's long-term debt totaled $1,107.6 million in the quarter's end.
In the quarter, Valmont concluded its $120-million Accelerated Share Repurchase program, which had begun in the fourth quarter of 2023.
Outlook
For 2024, Valmont anticipates a net sales change of -2% to 0.5%. It expects EPS of $15.40-$16.40. It also anticipates capital expenditures in the $110-$125 million range. The effective tax rate is projected to be around 26%.
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 an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Valmont has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Valmont Industries, Inc. (VMI) : Free Stock Analysis Report
