Valmont (VMI) Slashes FY14 Earnings Outlook, Shares Down - Analyst Blog

Valmont Industries, Inc. (VMI) recently lowered its full-year 2014 earnings guidance. The company previously forecasted its earnings for 2014 in the range of $9.35 to $9.65 per share, assuming that its irrigation business will be profitable in the second half of the year roughly at the same rate as last year and also excluding the impact of any share repurchases. However, the company now expects its earnings in the range of $8.70 to $8.90 for 2014.

Valmont has also provided its segment outlook for 2014. It is currently facing certain near-term challenges in its North American utility structures business. Projects worth more than $40 million in the Utility Support Structures Segment which were scheduled for delivery in the second half of 2014 were delayed until 2015. Pricing remains weak in specific areas of the market.

Valmont anticipates operating income in its Irrigation segment to be roughly 10% lower in the second half than the same period a year ago based on lower farm commodity price and harvest trends in North America.

Coatings and Engineered Infrastructure Products segments are expected to be affected by the weakness in the Australian industrial economy. Nevertheless, Valmont sees favorable year over year earnings comparison in the Engineered Infrastructure Products division in the second half.

Valmont's shares fell 1.1% to close at $135.85 last Friday. The stock is down around 8.5% so far this year.

Valmont released its second-quarter 2014 results in Jul 2014. The company's profit for reported quarter slipped year over year due to lower sales across most businesses. Earnings were in line with the Zacks Consensus Estimate while sales missed.

Valmont, which is among the prominent steel-pipe and tube companies along with MRC Global Inc. (MRC), Mueller Water Products, Inc. (MWA) and Tenaris SA (TS), registered revenues of $842.6 million in the last reported quarter, down 4.1% from $878.7 million in the year-ago quarter. The decrease was mainly due to lower sales in the Utility Support Structures, Coatings and Irrigation segments. Sales lagged the Zacks Consensus Estimate of $860 million.

Valmont, which currently carries a Zacks Rank #3 (Hold), will report its third-quarter results on Oct 23.