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Jul 01, 2023
Valmont Q2 2023 Earnings Report
Expanded operating margins and record earnings per share were achieved.
Key Takeaways
Valmont Industries reported a decrease in net sales by 7.9% to $1.0 billion, but demonstrated strong performance through expanded operating margins and record earnings per share of $4.21. The company's operating income increased by 12.6% to $133.7 million, representing 12.8% of net sales. Despite softer demand in North America agriculture and telecommunications markets, Valmont maintained disciplined pricing strategies and solid execution by global teams.
Net Sales decreased by 7.9% to $1.0 billion.
Operating Income increased by 12.6% to $133.7 million, or 12.8% of net sales.
Diluted Earnings per Share (“EPS”) grew to $4.21.
Generated solid operating cash flows of $88.3 million.
Valmont
Valmont
Forward Guidance
Valmont updated its full-year net sales growth outlook to 0% to 2% but maintained its diluted earnings per share outlook.
Positive Outlook
- Expect full-year operating margin improvement compared to 2022.
- Long-term need for critical infrastructure investment globally supporting multi-year market growth.
- Strong backlog reflecting robust demand and customer trust.
- International agriculture market demand remains strong.
- Expect profitable growth across the portfolio with full-year 2023 adjusted operating margins approaching 12%.
Challenges Ahead
- Near-term softness in North America agriculture and telecommunications markets.
- Capex spending by wireless carriers more aligned with historical trends following record levels of investment.
- Modestly lower sales expected in North America agriculture in the second half of the year compared to the first half.
- Growers taking a wait-and-see approach to purchasing decisions.
- Outcomes of the fall harvest should provide more clarity on farmer sentiment and expected buying patterns.