Valmont Industries, Inc. VMI registered profits of $22.6 million or $1.06 per share in second-quarter 2020, down from $39.7 million or $1.82 per share in the year-ago quarter. Barring one-time items, adjusted earnings were $2.00 per share for the reported quarter, beating the Zacks Consensus Estimate of $1.47.
Revenues in the quarter were $688.8 million, down 1.7% year over year. The figure, however, surpassed the Zacks Consensus Estimate of $648.8 million. Strong growth in Utility Support Structures was more than offset by reduced sales in the Coatings segment due to the impacts of the coronavirus outbreak.
Sales in the Engineered Support Structures segment fell 2.1% year over year to $253.4 million due to unfavorable currency impacts of $6.1 million.
Sales in the Utility Support Structures segment rose 10.2% year over year to $231.3 million on account of substantially larger volumes from strong market demand, capacity additions and favorable pricing.
Sales in the Coatings segment declined 18.7% year over year to $80 million as higher internal volumes were more than offset by lower external volumes due to the coronavirus outbreak’s effects on end customers and temporary international facility closures.
Sales in the Irrigation unit amounted to $150.6 million, down 3% year over year. Sales in North America were $99 million, down 3.7% year over year. Higher sales of irrigation products and pricing were offset by lower industrial tubing sales.
International irrigation sales fell 1.5% year over year to $51.6 million.
Valmont Industries, Inc. Price, Consensus and EPS Surprise
Valmont Industries, Inc. price-consensus-eps-surprise-chart | Valmont Industries, Inc. Quote
Valmont ended the second quarter with cash and cash equivalents of $353.3 million, up 37.5% year over year. Long-term debt stood at $778.3 million, up 1.6% year over year.
Cash flows from operating activities were $150.7 million for the year-to-date period (as of Jun 27, 2020), up from $113.4 million for the same period a year ago (as of Jun 29, 2019).
The company expects net sales of $680-700 million for third-quarter 2020.It also expects operating profit margins of 8-9% for the third quarter.
Valmont anticipates revenues from the Utility Support Structures segment to increase around 20% year over year for the third quarter.
The company’s shares have lost 14.6% in the past year compared with the industry’s 36.5% decline.
Zacks Rank & Other Stocks to Consider
Valmont currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are Royal Gold, Inc. RGLD, Agnico Eagle Mines Limited AEM andHarmony Gold Mining Company Limited HMY.
Royal Goldhas a projected earnings growth rate of 62.1% for the current year. The company’s shares have gained 13.5% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle has a projected earnings growth rate of 73.2% for the current year. The stock has gained around 30% in a year. It currently has a Zacks Rank of 1.
Harmony Gold has an expected earnings growth rate of 264.3% for 2020. The company’s shares have rallied 154.8% in the past year.It is presently a Zacks #2 Ranked player.
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