Valmont Industries Inc.’s (VMI) fourth-quarter 2012 earnings of $2.43 per share outstripped the Zacks Consensus Estimate of $2.24, while declining from the prior-year quarter’s earnings of $4.33 per share.
Profit slid roughly 43% year over year to $65 million in the reported quarter. The year-ago quarter’s profit was boosted by one-time benefits associated with the reorganization of the company's legal structure. Barring that benefit, earnings were $1.83 per share a year ago.
For full-year 2012, earnings came in at $8.75 per share, also topping the Zacks Consensus Estimate of $8.56.
Valmont, which is among the prominent steel-pipe and tube companies along with MRC Global Inc. (MRC), Synalloy Corp. (SYNL) and Tenaris SA (TS), posted revenues of $815 million in the fourth quarter, up 8% year over year. It exceeded the Zacks Consensus Estimate of $792 million. Sales were driven by double-digit gains across the company’s Utility Support Structures and Irrigation segments.
For the full year, revenues jumped 14% year over year to $3,029.5 million, essentially in line with the Zacks Consensus Estimate.
Revenues from the Utility Support Structures division soared 25% year over year to $252.6 million in the fourth quarter, driven by higher demand from utility companies in North America as they continue to upgrade transmission grid. International sales rose on higher export revenues from China.
Irrigation Segment sales jumped 13% year over year to $203.4 million as high crop pricing supported demand in North America. However, international revenues fell in the quarter.
The Engineered Infrastructure Products division logged sales of $229.1 million, up 4% year over year. Revenues from lighting and traffic products were flat in North America. European lighting and traffic structure sales fell due to a weak economy. Sales rose across all product lines in Asia-Pacific. Sales of wireless communication structures and components increased in North America while declining in China
Revenues from the Coatings segment dipped 7% to $83.2 million on lower demand in Australia. Sales were flat in North America as higher internal irrigation and utility demand was masked by lower custom demand.
Valmont exited 2012 with cash and cash equivalents of $414.1 million, up 14% year over year. Total long-term debt was stable year over year at $472.8 million.
Moving ahead, Valmont expects continued strength in its utility business in 2013, manifested by healthy order backlogs. It also expects a strong first half in the Irrigation division.
Valmont expects healthy demand for the Coatings segment. Moreover, it envisions modest sales gains in the Engineered Infrastructure Products unit despite the government spending constraint. The company foresees low-teens revenue increase and high-teens earnings gain in 2013.
Valmont currently retains a Zacks Rank #2 (Buy).
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