Core Viewpoint - Valmont Industries (NYSE: VMI) is recommended as a buy due to its strong positioning to benefit from long-term growth driven by secular tailwinds in infrastructure, grid modernization, renewable integration, and 5G [1] Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - A bottom-up analysis is employed to assess the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - Valmont Industries (NYSE: VMI) is recommended as a buy due to its strong positioning to benefit from long-term growth driven by secular tailwinds in infrastructure, particularly in grid modernization, renewable integration, and 5G [1] Investment Strategy - The investment approach focuses on long-term investments while also incorporating short-term shorts to identify alpha opportunities [1] - A bottom-up analysis is employed to assess the fundamental strengths and weaknesses of individual companies [1] - The investment duration is medium to long-term, targeting companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Insights - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] - Valmont Industries (VMI) currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The Zacks Rank for Valmont Industries is 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Price Performance - VMI shares have increased by 3.82% over the past week, outperforming the Zacks Steel - Pipe and Tube industry, which rose by 1.3% [5] - Over the past month, VMI's price change is 8.92%, significantly higher than the industry's 2.14% [5] - In the last quarter, VMI shares rose by 10.15%, and over the past year, they gained 23.21%, while the S&P 500 increased by 6.56% and 15.83%, respectively [6] Trading Volume - The average 20-day trading volume for VMI is 157,152 shares, which serves as a baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, three earnings estimates for VMI have been revised upwards, while none have been lowered, raising the consensus estimate from $18.63 to $19.02 [9] - For the next fiscal year, one estimate has increased, while one has decreased during the same period [9] Conclusion - Considering the strong price performance, positive earnings revisions, and high Momentum Style Score, VMI is identified as a solid momentum pick and is recommended for investors looking for potential near-term gains [11]

Core Insights - Valmont Industries, Inc. (VMI) reported third-quarter 2025 earnings of $4.98 per share, a 21% increase from $4.11 in the same quarter last year, surpassing the Zacks Consensus Estimate of $4.64 [1] - The company's profits reached $99.03 million, up from $83.07 million year over year [1] - VMI's revenues for the third quarter were $1,046 million, reflecting a 2.5% year-over-year increase and exceeding the Zacks Consensus Estimate of $1,038.8 million [1][8] Segment Performance - Infrastructure segment revenues increased by 6.6% year over year to $808.3 million, driven by strong utility demand and improved factory throughput, surpassing the estimate of $772.4 million [2] - Utility sales rose by 12.3% due to favorable pricing and higher volumes, while telecommunications sales grew significantly due to effective execution aligned with carrier investment programs [3] - Coatings revenue also saw an increase, but these gains were partially offset by a decline in Solar sales and reduced Lighting & Transportation sales in the Asia-Pacific region [3] Agriculture Segment - Agriculture revenue declined by approximately 9% year over year to $241.3 million, missing the estimate of $263.7 million, primarily due to weaker demand for irrigation equipment and macroeconomic challenges [4] - International sales faced additional pressure from project sales timing in the Middle East, while North American agricultural demand remained soft [4] Financial Overview - The company ended the quarter with cash and cash equivalents of $226.1 million, with cash provided by operating activities at $345.2 million, down 32% year over year [5] - VMI returned $39.2 million to shareholders through dividends and share repurchases during the quarter and invested $41.9 million in capital expenditures for growth initiatives [5] 2025 Outlook - VMI updated its full-year 2025 guidance, anticipating net sales of approximately $4.1 billion, with infrastructure segment revenue of around $3.1 billion and agriculture segment revenue of about $1 billion [6] - The adjusted earnings per share outlook was raised to a range of $18.70 to $19.50 from the previous range of $17.50 to $19.50, with capital expenditure expected to be between $140 million and $160 million [6] Stock Performance - VMI's shares have increased by 25.1% over the past year, outperforming the industry's rise of 15.5% [7]

Core Insights - Valmont Industries (VMI) reported revenue of $1.05 billion for the quarter ended September 2025, marking a year-over-year increase of 2.5% and an EPS of $4.98 compared to $4.11 a year ago, exceeding the Zacks Consensus Estimate of $1.04 billion by +0.69% and delivering an EPS surprise of +7.33% [1] Financial Performance - Total Sales- Intersegment: Reported at $-3.64 million, slightly better than the average estimate of $-4.03 million, representing a year-over-year change of -1.3% [4] - Net Sales- Agriculture: Reported at $239.42 million, compared to the estimated $233.58 million, reflecting a year-over-year decline of -9.2% [4] - Total Sales- Infrastructure: Reported at $808.29 million, exceeding the average estimate of $790.13 million, with a year-over-year increase of +6.6% [4] - Adjusted Operating Income- Infrastructure: Reported at $143.38 million, surpassing the estimate of $130.39 million [4] - Adjusted Operating Income- Agriculture: Reported at $23.19 million, below the estimate of $28.6 million [4] Stock Performance - Valmont's shares have returned +8.9% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Net sales increased by 2.5% year-over-year to $1.05 billion, with operating margin improving by 120 basis points and diluted earnings per share rising by 21% to $4.98 [4][14][15] - Gross profit margin increased to 30.4%, up 80 basis points from the previous year [14] - Operating income rose to $141 million, with operating margins at 13.5%, reflecting improved infrastructure results [14][15] Business Line Data and Key Metrics Changes - Infrastructure sales grew by 6.6% to $808.3 million, driven by a 12.3% increase in utility sales due to pricing and higher volumes [15] - Agriculture sales decreased by 9% year-over-year to $241.3 million, primarily due to lower irrigation equipment volumes and economic pressures in Brazil [16][17] Market Data and Key Metrics Changes - The utility market is experiencing strong demand driven by data center expansion, manufacturing onshoring, and broader electrification, with transmission CapEx expected to grow at a 9% CAGR through 2029 [8][15] - The Asia-Pacific market for lighting and transportation remains pressured, with operational challenges impacting results [9][15] Company Strategy and Development Direction - The company is focused on simplifying its business, directing resources to high-return initiatives, and enhancing performance in attractive markets [5][6] - Valmont aims to lead the North American utility market through capacity expansion and operational improvements, with significant investments in brownfield utility expansions [5][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the business, despite near-term macro pressures, and highlighted the importance of disciplined execution and innovation [12][20] - The company raised its full-year adjusted diluted earnings per share expectations to a range of $18.70-$19.50, indicating positive momentum [22] Other Important Information - The company is investing in technology and aftermarket parts, with aftermarket sales growing by 15% year-over-year [20] - A new Chief Accounting Officer has joined the team, bringing extensive experience in large-scale manufacturing [22] Q&A Session Summary Question: Infrastructure margins and improvement initiatives - Management highlighted that margin improvements stem from pricing and cost actions, with utility expansions contributing significantly to operating margins [25][26] Question: Capacity additions in utility - Management confirmed that capacity additions are tracking above expectations, with plans to exceed the benchmark of $100 million in additional revenue for every $100 million of capacity [29][30] Question: Utility segment pricing trends - Management indicated that pricing remains strong due to tariff mitigation plans and a healthy bid market, with expectations for continued strength in pricing [63][64] Question: Agriculture margins and bad debt expense - Management acknowledged challenges in agriculture margins due to lower sales and bad debt expense, but expects improvements in future quarters as issues are resolved [66][67]

Financial Data and Key Metrics Changes - The company reported net sales of $1.05 billion, reflecting a 2.5% year-over-year increase [14] - Operating margin improved by 120 basis points to 13.5%, with diluted earnings per share increasing by 21% to $4.98 [14][15] - Gross profit margin rose to 30.4%, an increase of 80 basis points from the previous year [14] Business Line Data and Key Metrics Changes - Infrastructure sales reached $808.3 million, up 6.6% year-over-year, with utility sales increasing by 12.3% driven by pricing and higher volumes [15] - Agriculture sales decreased by 9% year-over-year to $241.3 million, primarily due to lower irrigation equipment volumes in North America and economic pressures in Brazil [16][17] - Telecommunications sales grew by 37%, supported by a quick turnover strategy and alignment with carrier programs [15] Market Data and Key Metrics Changes - The utility market is experiencing strong demand driven by data center expansion, manufacturing onshoring, and broader electrification, with transmission CapEx expected to grow at a 9% CAGR through 2029 [8] - The Asia-Pacific market for lighting and transportation remains pressured, with operational challenges impacting performance [9] - In agriculture, grower sentiment in North America is soft, with the USDA expecting a 2.5% decline in crop receipts for 2025 [9][10] Company Strategy and Development Direction - The company is focused on simplifying its business, directing resources to high-return initiatives, and enhancing performance in attractive markets [5] - Valmont aims to lead the North American utility market through capacity expansion and operational improvements [5][19] - The company is investing in aftermarket parts and technology to build a more resilient agriculture business [7][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the business despite near-term macro pressures [12] - The company is raising its full-year adjusted diluted earnings per share expectations to a range of $18.70 to $19.50 [22] - Management highlighted the importance of maintaining flexibility in capacity to respond to customer needs while ensuring operational efficiency [30] Other Important Information - The company recorded $11 million in bad debt expense due to tighter credit conditions in Brazil, impacting agriculture margins [17][67] - The company plans to consolidate solar revenues into another product line for reporting purposes starting in 2026 [15] - The company has a strong backlog in utility projects, with demand expected to remain robust across various product lines [57] Q&A Session Summary Question: Can you discuss the infrastructure margins and the most impactful margin improvement initiatives? - Management noted that pricing and cost actions have contributed to improved margins, with utility expansions expected to drive significant operating margin contributions [25][26] Question: What is the outlook for utility segment pricing trends? - Management indicated that pricing remains strong due to tariff mitigation plans and a tight demand-supply balance in the bid market [64][66] Question: Are current demand drivers in utility across different product lines? - Management confirmed strong demand across all product lines, driven by electrification, AI, and grid connectivity, with a healthy backlog extending into 2026 [57][58] Question: What is the expectation for agriculture margins moving forward? - Management expects agriculture margins to improve in Q1, with efforts to resolve current bad debt issues and a focus on maintaining double-digit operating margins [67][68]

Financial Data and Key Metrics Changes - The company reported net sales of $1.05 billion, reflecting a year-over-year increase of 2.5% [12] - Operating margin improved by 120 basis points to 13.5%, with diluted earnings per share increasing by 21% to $4.98 [4][14] - Gross profit margin rose to 30.4%, an increase of 80 basis points from the previous year [12] Business Line Data and Key Metrics Changes - Infrastructure sales reached $808.3 million, growing 6.6% year-over-year, with utility sales increasing by 12.3% driven by pricing and higher volumes [14] - Agriculture sales decreased by 9% year-over-year to $241.3 million, primarily due to lower irrigation equipment volumes in North America [15] - Telecommunications sales grew by 37%, supported by a quick turnover strategy and alignment with carrier programs [14] Market Data and Key Metrics Changes - The utility market is experiencing strong demand driven by data center expansion, manufacturing onshoring, and broader electrification, with transmission CapEx expected to grow at a 9% CAGR through 2029 [7] - The Asia-Pacific market for lighting and transportation remains pressured, with operational factors impacting results [8] - In agriculture, North American grower sentiment is soft, with the USDA expecting a 2.5% decline in crop receipts for 2025 [8] Company Strategy and Development Direction - The company is focused on simplifying its business, directing resources to high-return initiatives, and enhancing performance [5] - Valmont aims to lead the North American utility market through a multi-pronged growth approach, including capacity expansion and operational improvements [5] - The company is investing in technology and aftermarket parts to build a more resilient agriculture business [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the business, despite near-term macro pressures [11] - The company is raising its full-year adjusted diluted earnings per share expectations to a range of $18.70 to $19.50 [20] - Management highlighted the importance of disciplined resource allocation and continuous improvement in operations [19] Other Important Information - The company plans to consolidate solar revenues into another product line for reporting purposes starting in 2026, as solar revenues are expected to be approximately 2% of total revenues going forward [14] - The company ended the quarter with approximately $226 million in cash, and net debt leverage remains below one times [16] Q&A Session Summary Question: Infrastructure margins performance - Management noted that the margin benefits have come from a combination of pricing and cost actions, with utility expansions contributing significantly to operating margins [24][25] Question: Capacity additions in utility - Management confirmed that the business is on track to exceed the benchmark of $100 million additional revenue for every $100 million of capacity added, with ongoing investments planned [26][27] Question: Utility segment pricing contributions - Pricing and volume were identified as relatively equal contributors to the 12.3% growth in utility sales, with pricing actions taken earlier in the year playing a significant role [32] Question: Agriculture business backlog - Management indicated that while the backlog is lower, the market environment remains supportive, and the project pipeline is diverse and strong [41][42] Question: Agriculture margins and bad debt expense - Management expects challenges in agriculture margins to continue in the fourth quarter but anticipates improvements in Q1 as issues are resolved [62]

Financial Data and Key Metrics Changes - Net sales increased by 2.5% year over year to $1,050 million, with operating margin improving by 120 basis points to 13.5% [20][21] - Diluted earnings per share rose by 21.2% to $4.98, marking a notable improvement compared to historical third-quarter performance [5][19] - Gross profit margin increased by 80 basis points to 30.4% [20] Business Line Data and Key Metrics Changes - Infrastructure sales grew by 6.6% to $808.3 million, with utility sales increasing by 12.3% driven by pricing and higher volumes [22] - Agriculture sales decreased by 9% year over year to $241.3 million, primarily due to lower irrigation equipment volumes and economic pressures in Brazil [24] - Telecommunications sales grew by 37%, supported by a quick turn order strategy [22] Market Data and Key Metrics Changes - The utility market is experiencing strong demand driven by data center expansion, manufacturing onshoring, and broader electrification, with transmission CapEx expected to grow at a 9% CAGR through 2029 [10] - The agriculture market in North America remains soft, with the USDA expecting a 2.5% decline in crop receipts for 2025 [13][14] - International sales in agriculture showed double-digit growth year to date, despite challenges in specific regions [16] Company Strategy and Development Direction - The company is focused on simplifying its business, directing resources to high-return initiatives, and enhancing performance through disciplined execution [5][6] - Valmont aims to lead the North American utility market through capacity expansions and operational improvements [6][27] - The strategy includes investing in aftermarket parts and technology to improve margins and support long-term growth [7][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of the business, despite near-term macro pressures [17][18] - The company is raising its full-year earnings guidance, projecting net sales of approximately $4.1 billion and adjusted diluted earnings per share in the range of $18.7 to $19.5 [30][31] - Management highlighted the importance of maintaining flexibility in capacity to respond to customer needs while ensuring operational efficiency [44][45] Other Important Information - The company recorded $11 million in bad debt expense in the agriculture segment, impacting operating income and margins [25][83] - Cash and liquidity remain strong, with approximately $226 million in cash and net debt leverage below one times [26] - The company is investing in a project to simplify its legal entity structure to improve efficiency and reduce compliance burdens [29] Q&A Session Summary Question: What are the main opportunities for margin expansion in the infrastructure segment? - Management indicated that margin improvements stem from pricing and cost actions, with utility expansions contributing significantly to operating margins [35][36] Question: Can you discuss the capacity additions in the utility segment? - Management confirmed that capacity additions are tracking above expectations, with plans to exceed the benchmark of $100 million in additional revenue for every $100 million of capacity [39][40] Question: What is the outlook for pricing trends in the utility segment? - Management expects strong pricing trends to continue due to a tight demand-supply balance and healthy margins in the bid market [81] Question: What is driving current demand in the utility segment? - Demand is strong across all product lines, driven by electrification, AI, and grid connectivity, with a well-diversified customer base [73][74] Question: What are the expectations for agriculture margins moving forward? - Management anticipates that while Q4 may be challenging, margins should improve in Q1 as bad debt issues are resolved [84]

Q3 2025 Financial Performance - Net sales reached $1.05 billion, a 2.5% increase compared to the previous year[10] - Operating margin improved by 120 bps to 13.5%[10] - Diluted EPS increased by 21.2% to $4.98[10] Segment Performance - Infrastructure sales increased by 6.6% to $808.3 million, with operating income up by 15.9%[27, 28] - Utility sales grew by 12.3% to $391.9 million, while Telecommunications saw a significant increase of 37.0% to $88.1 million[31] - Agriculture sales decreased by 9.0% to $241.3 million, with operating income down by 19.7%[34, 35] Capital Allocation and Cash Flow - Q3 2025 operating cash flows were $112.5 million[43] - The company invested $42 million in capital expenditures[41] - Share repurchases amounted to $26 million at an average price of $374.33 per share[41] Outlook - Full-year 2025 net sales are projected to be approximately $4.1 billion[46] - Adjusted diluted EPS outlook raised to $18.70 to $19.50[46] - The adjusted effective tax rate is expected to be around 25.0%[46]