Valmont Q3 2023 Earnings Report
Key Takeaways
Valmont Industries reported a decrease in net sales by 4.3% to $1.1 billion, but the adjusted net sales only decreased by 2.3% after accounting for the divestiture of the offshore wind energy structures business. The company faced an operating loss of $24.2 million due to impairment charges, but adjusted operating income increased by 5.9%. Diluted loss per share was ($2.34), but adjusted EPS was $4.12, an 18.1% increase. Strong operating cash flow generation was a highlight, and the company updated its full-year financial outlook.
Net sales decreased by 4.3%, but adjusted net sales decreased by 2.3% when accounting for the divestiture of the offshore wind energy structures business.
Operating loss was ($24.2) million, which included non-cash impairment charges, but adjusted operating income increased by 5.9%.
Diluted loss per share was ($2.34), but adjusted diluted EPS was $4.12, an 18.1% increase.
Generated strong operating cash flows of $81.3 million and updated the full-year financial outlook.
Valmont
Valmont
Forward Guidance
Valmont updated its full-year net sales growth and earnings per share outlook, considering third quarter results, the timing of international agriculture project shipments, and the near-term demand outlook for telecommunications markets.
Positive Outlook
- The impairment charge significantly reduces the future Prospera technology intangible asset amortization.
- The realignment program lowers future stock-based compensation to be recognized for Prospera employees.
- Expect full-year operating margin improvement compared to 2022.
- Adjusted effective tax rate of 26% to 26.5% due to recent favorable U.S. tax legislation.
- Minimal expected foreign currency translation impact to net sales.
Challenges Ahead
- Net Sales Growth (vs. PY) (3%) to (4%)
- GAAP Diluted Earnings per Share $7.20 to $7.50
- Telecommunications markets near-term headwinds
- Farmers are facing headwinds in North America
- Farmers sentiment is muted