Valmont's (VMI) Q4 Earnings Beat Estimates, Revenues Miss
Valmont Industries, Inc. VMI reported fourth-quarter 2023 adjusted earnings per share of $3.18, down from $3.57 in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate of $3.08.
The company expanded gross profit margins in the reported quarter, thanks to its pricing strategies and operational efficiencies, notwithstanding lower volumes.
The company’s revenues were $1,015.5 million in the quarter, down 10.3% year over year.. The top line missed the Zacks Consensus Estimate of $1,037.6 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 fourth-quarter revenues decreased 3% year over year to $748.3 million. The figure topped our estimate of $714.2 million. Higher volumes in the Transmission, Distribution and Substation and Solar product lines and favorable pricing were more than offset by lower Telecommunications and Coatings volumes.
Revenues from the Agriculture segment totaled $271.6 million, which decreased 18.9% year over year. The figure missed our estimate of $320.6 million. In North America, irrigation equipment volumes fell as the fourth quarter of 2022 benefited from the continued delivery of an elevated backlog. The average irrigation selling price was comparable to the previous year.
Financials
The company achieved $210 million in free cash flow for 2023 through earnings and sound working capital management. At the end of 2023, cash and cash equivalents were $203 million.
The fourth quarter saw the purchase of $178.6 million in company stock, which included the $120 million Accelerated Share Repurchase program. VMI had $136.1 million remaining on the authorized share repurchase program at the end of the year.
Outlook
For 2024, Valmont anticipates a net sales change of -3% to flat. It expects EPS of $14.25-$15.5. It also anticipates capital expenditures in the $125-$140 million range for 2024. Effective tax rate is assumed to be 26%.
Price Performance
VMI shares are down 23.9% in the past year compared with the industry’s decline of 15.1% over the same period.
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Zacks Rank & Other Key Picks
Valmont currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the basic materials space include United States Steel Corporation X, Carpenter Technology Corporation CRS and Alpha Metallurgical Resources Inc. AMR.
United States Steel carrying a Zacks Rank #1 (Strong Buy). X beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 54.8%. The company’s shares have soared 62.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 12.2%. The company’s shares have soared 33.7% in the past year.
The Zacks Consensus Estimate for AMR’s current-year earnings has been revised upward by 69% in the past 60 days. It currently carries a Zacks Rank #1. AMR delivered a trailing four-quarter earnings surprise of roughly 9.6%, on average. AMR shares are up around 128.8% in a year.
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