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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.
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
Historical Earnings Impact
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Avg. Return Before/After Earnings
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