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Sep 26, 2020
Valmont Q3 2020 Earnings Report
Valmont experienced revenue growth and earnings improvement through operational excellence and strategic pricing.
Key Takeaways
Valmont Industries reported a 6.3% increase in net sales to $734.0 million, driven by strong Utility Support Structures segment sales and improved international market demand. Diluted earnings per share improved to $1.84, and the company generated strong operating cash flow of $122.3 million.
Net Sales increased 6.3% to $734.0 million.
Diluted Earnings per Share improved to $1.84.
Operating cash flow was strong at $122.3 million.
A $240.0 million multi-year order was announced for irrigation products and services in Egypt.
Valmont
Valmont
Forward Guidance
The company provided financial outlook and key assumptions for fourth quarter 2020, including net sales between $715.0 to $735.0 million and adjusted operating profit margin between 8.0% to 9.0%. Irrigation segment sales are expected to increase by ~12%-15% compared to the prior year.
Positive Outlook
- Irrigation sales estimate driven by expected timing of international project deliveries
- Positive operating cash flows
- Stable raw material costs and no significant supply chain interruptions
- No closures of large manufacturing facilities or workforce disruptions
- Demand to remain strong in wireless communications markets as 5G build-outs continue to ramp
Challenges Ahead
- Pandemic's impacts on global economic factors and pace of economic recovery remain uncertain
- Tax rate of ~ 25.0%
- Coatings business is trending in line with industrial production levels and will improve over time as the general economy improves
- While the pandemic's impacts on global economic factors and pace of economic recovery remain uncertain
- No closures of large manufacturing facilities or workforce disruptions