Valmont Industries Q2 Profit Beats Estimates, Sees 2013 Earnings Above View

(RTTNews) - Fabricated metal products maker Valmont Industries Inc. (VMI) on Wednesday reported a 49 percent increase in profit for the second quarter from last year on higher sales across all four business segments. In addition, the latest quarter's results include a one-time gain.

Earnings per share for the latest quarter beat analysts' estimates, while revenues missed their expectations. Looking ahead, the company forecast fiscal 2013 earnings above Street estimates.

Valmont's utility support structures segment recorded an 8 percent increase in sales for the second quarter to $228.24 million and represented 26 percent of quarterly sales. The growth was mostly a result of increased North American transmission structure demand. Sales declined in international markets due to the timing of large products.

Irrigation segment sales for the quarter surged 39 percent to $270.18 million, and represented 31 percent of quarterly sales. The growth reflected significant increases in both North American and international markets. Recent demand remained strong due to historically high farm incomes and was further supported by last year's drought in North America. In international markets, sales increases reflect further market penetration.

Engineered Infrastructure products reported a 6 percent increase in sales to $250.64 million and accounted for 29 percent of sales in the quarter. Sales gains primarily reflect the addition of $18 million in revenue from the February 2013 acquisition of Locker Group.

In the coatings segment, sales rose 11 percent to $93.80 million and represented 11 percent of quarterly sales. North American sales increased due to a $9 million contribution from the acquisition of Pure Metal in late 2012. Economic recovery along with intercompany demand supported North American volumes. In the Asia-Pacific region, sales were comparable to last year.

Valmont's second-quarter net earnings were $89.56 million or $3.33 per share, up from $59.98 million or $2.24 per share in the year-ago period.

The latest quarter's results included a pre-tax gain of $0.16 per share as the company divested a galvanizing operation in Perth, Australia.

On average, nine analysts polled by Thomson Reuters expected the company to earn $2.92 per share for the latest quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 15 percent to $878.66 million from $767.32 million in the same period last year. Analysts had a consensus revenue estimate of $884.58 million.

Looking ahead to fiscal 2013, Valmont forecasts earnings to exceed $11.00 per share. Earlier, the company had forecast "high teens" earnings growth for the year. Analysts currently expect the company to earn $10.72 per share for the year.

Mogens Bay, Valmont's Chairman and CEO said, "Our current second half outlook is for positive consolidated sales and earnings comparisons, although at less favorable comparisons than experienced in the first half."

VMI closed Wednesday's regular trading session at $148.00, down $0.26 or 0.18 percent on a volume of 293,713 shares. In after-hours, the stock gained $1.00 or 0.68 percent to $149.00.