Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, leveraging established price movements for profitable trades [1] Company Overview: Valmont Industries (VMI) - Valmont Industries currently holds a Momentum Style Score of A, indicating strong momentum characteristics [1] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [2] Price Performance - VMI shares have increased by 1.35% over the past week, while the Zacks Steel - Pipe and Tube industry has decreased by 0.51% during the same period [3] - Over the past month, VMI's price change is 14.3%, significantly outperforming the industry's 0.94% [3] - In the last quarter, VMI shares rose by 9.13%, and over the past year, they have increased by 40.76%, compared to the S&P 500's gains of 4.71% and 39.26%, respectively [3] Trading Volume - VMI's average 20-day trading volume is 117,171 shares, which serves as a bullish indicator when combined with rising stock prices [3] Earnings Outlook - In the last two months, one earnings estimate for VMI has been revised upward, while none have been revised downward, leading to an increase in the consensus estimate from $16.88 to $16.90 [4] - For the next fiscal year, one estimate has also moved upwards with no downward revisions [4] Conclusion - Given the strong momentum indicators and positive earnings outlook, VMI is recommended as a 2 (Buy) stock with a Momentum Score of A, making it a potential candidate for near-term investment [4]

Financial Data and Key Metrics Changes - Revenues for Q3 2024 were $1 billion, a decrease of 2.9% compared to the previous year [15] - Operating income increased by $4.9 million to $125.7 million, with operating margin improving by 80 basis points to 12.3% of net sales [16] - Earnings per share remained stable at $4.11, with a 4.2% lower share count offsetting foreign currency losses and a normalized tax rate [16] Business Line Data and Key Metrics Changes - Infrastructure sales were $758.6 million, slightly increasing year-over-year, with operating income growing 14.5% to $123.7 million [17] - Lighting and Transportation revenues declined by 9.3% to $229.2 million, impacted by market softness and project timing [18] - Agricultural sales decreased by 11.1% to $265.3 million, with operating income down 25% to $28.9 million due to lower demand and grain prices [20] Market Data and Key Metrics Changes - North American sales in agriculture were slightly lower, with USDA forecasting a decline in net farm income and crop prices [11] - International sales in agriculture decreased primarily due to lower sales in Brazil, although order entry showed improvement [11] - The telecommunications business grew nearly 8% year-over-year, indicating a return to normalized spending levels by wireless carriers [10] Company Strategy and Development Direction - The company is focused on aligning with customers and markets benefiting from multiyear megatrends, emphasizing customer-driven innovation [6] - Strategic hires and internal promotions have been made to strengthen the executive leadership team [12] - The company aims to streamline operations, reduce costs, and effectively manage working capital to maximize cash flow [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth in both infrastructure and agriculture, citing strong demand drivers [13] - The company anticipates a normalized year in agriculture following strong storm sales in 2024, with cautious optimism for 2025 [29][45] - Management highlighted the importance of proactive grid investments in utilities, especially in light of recent hurricanes [8] Other Important Information - The company generated strong operating cash flows of $225 million, enhancing its balance sheet [5] - Capital spending year-to-date was approximately $54 million, with a focus on expanding production capacity [22] - The full-year net sales outlook remains unchanged, with expectations of a decrease between 1.5% and 3.5% compared to the previous year [23] Q&A Session Summary Question: Operating margins and agriculture improvement - Management acknowledged the need for meaningful improvement in agriculture to maintain operating margins close to 13% in 2025, despite current strong performance [27][28] Question: North American agriculture replacement sales - Management expects to see some benefits from replacement sales due to severe weather, but anticipates a more normalized year ahead [29] Question: Pricing in utility business - Management noted strong demand and deliberate pricing actions leading to higher average selling prices in the utility segment, despite steel price deflation [31][32] Question: Order rates in Brazil - Management expressed cautious optimism regarding improving order rates in Brazil, while acknowledging ongoing challenges due to low soybean prices [36][37] Question: Lighting and Transportation performance - Management identified weaknesses in residential lighting and project timing as key factors impacting performance, but expects improvement as housing markets rebound [38] Question: Telecommunications market activity - Management reported an 8% growth in telecommunications, with expectations for continued momentum driven by 5G network build-out [50]

Q3 2024 Financial Performance - Valmont's net sales were $1.02 billion, a decrease of 2.9% year-over-year[6, 14] - The operating margin increased year-over-year to 12.3%[6, 14] - Operating cash flows were strong at $225 million for Q3 2024, bringing the year-to-date total to $379 million[6, 27] Segment Results - Infrastructure sales increased by 0.5% to $758.6 million in Q3 2024[16] - Utility segment sales increased by 14.9% to $342.4 million[18] - Lighting and Transportation (L&T) sales decreased by 9.3% to $229.2 million[18] - Solar sales decreased significantly by 38.1% to $34.6 million due to project deselection[18] - Agriculture sales decreased by 11.1% to $265.3 million in Q3 2024[6, 21] - North America agriculture sales decreased by 5.4% to $120 million[23] - International agriculture sales decreased by 15.3% to $145.3 million[23] Capital Allocation and Liquidity - Year-to-date capital deployment totaled $145 million, including $55 million in share repurchases and $36 million in dividends[29] - The company reduced borrowings on its revolving line of credit by $120 million during the quarter[27] - Available liquidity was $832 million, including $200 million in cash and $632 million available under the revolving credit facility[26, 27] 2024 Outlook - Valmont reaffirmed its 2024 outlook, expecting a net sales change of -3.5% to -1.5% year-over-year and GAAP diluted EPS of $16.50 to $17.30[31] - Infrastructure net sales are expected to be flat to up 1.5% year-over-year[31] - Agriculture net sales are expected to be down 10.0% to 15.0% year-over-year[31]

Core Insights - Valmont Industries, Inc. (VMI) reported a third-quarter profit of $83 million or $4.11 per share, a significant improvement from a loss of $49 million or $2.34 per share in the same quarter last year, and beat the Zacks Consensus Estimate of $3.96 [1] - The company's revenues for the quarter were $1,020.2 million, down 2.9% year over year, but exceeded the Zacks Consensus Estimate of $1,019.1 million [1] Segment Review - The infrastructure segment's revenues increased by approximately 0.4% year over year to $756.4 million, although it fell short of the estimate of $759.3 million; utility sales surged around 15% due to a favorable project mix and higher volumes [2] - Agriculture segment revenues totaled $263.8 million, down 11.1% year over year, but surpassed the estimate of $261.8 million; international sales declined, particularly in Brazil, while growth was noted in the EMEA region [3] Financials - Operating cash flows amounted to $225.1 million, with cash and cash equivalents at $200.5 million at the end of the third quarter; the company paid $12.1 million in dividends and repurchased $40.1 million of its stock [4] - VMI reduced borrowings on its revolving credit facility by approximately $120 million this quarter, totaling a year-to-date net reduction of around $210 million [4] 2024 Outlook - Valmont anticipates a net sales decline of 1.5-3.5% and expects earnings per share to be in the range of $16.50 to $17.30; capital expenditures are projected to be between $85 million and $95 million to support strategic growth initiatives [5] Stock Performance - VMI shares have increased by 28.2% over the past year, outperforming the industry's rise of 8.9% during the same period [6]

Core Insights - Valmont Industries reported revenue of $1.02 billion for the quarter ended September 2024, reflecting a decrease of 2.9% year-over-year, while EPS was $4.11, slightly down from $4.12 in the previous year [1] - The revenue exceeded the Zacks Consensus Estimate by +0.10%, and the EPS surpassed the consensus estimate of $3.96 by +3.79% [1] Financial Performance Metrics - Total Sales- Intersegment: reported at -$3.69 million, slightly worse than the estimated -$3.51 million, but a +13.1% change compared to the year-ago quarter [2] - Total Sales- Infrastructure: $758.58 million, below the estimated $770.03 million [2] - Total Sales- Agriculture: $265.29 million, exceeding the estimated $253.27 million [2] - Operating Income / (loss)- Corporate: -$26.82 million, worse than the average estimate of -$23.77 million [2] - Operating Income / (loss)- Infrastructure: $123.66 million, better than the average estimate of $118.07 million [2] - Operating Income / (loss)- Agriculture: $28.89 million, exceeding the average estimate of $26.47 million [2] Stock Performance - Valmont's shares have returned +5.4% over the past month, outperforming the Zacks S&P 500 composite's +2.8% change [2] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [2]

Core Insights - Valmont Industries (VMI) reported quarterly earnings of $4.11 per share, exceeding the Zacks Consensus Estimate of $3.96 per share, but slightly down from $4.12 per share a year ago, indicating a 0.24% year-over-year decline [1] - The company achieved a revenue of $1.02 billion for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 0.10%, but down from $1.05 billion in the same quarter last year [1] - Valmont has consistently surpassed consensus EPS estimates over the last four quarters, achieving an earnings surprise of 3.79% in the latest report [1] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.72 on revenues of $1.02 billion, while for the current fiscal year, the estimate is $16.90 on revenues of $4.06 billion [4] - The estimate revisions trend for Valmont is currently favorable, resulting in a Zacks Rank 1 (Strong Buy), suggesting that the shares are expected to outperform the market in the near future [4] Industry Context - The Steel - Pipe and Tube industry, to which Valmont belongs, is currently ranked in the top 40% of over 250 Zacks industries, indicating a positive outlook for stocks within this sector [5] - MRC Global, another company in the same industry, is expected to report a significant year-over-year earnings decline of 43.8% in its upcoming results, with a consensus EPS estimate of $0.18 [5]

Financial Performance - Net sales for Q3 2024 were $1.0 billion, a decrease of 2.9% compared to Q3 2023[2] - Operating income increased to $125.7 million, representing 12.3% of net sales, compared to an operating loss of ($24.2) million in Q3 2023[2] - Diluted earnings per share (EPS) were $4.11, a significant improvement from a diluted loss per share of ($2.34) in Q3 2023[2] - Generated strong operating cash flows of $225.1 million, with cash and cash equivalents at $200.5 million at the end of Q3[2] - The company reaffirmed its full-year 2024 financial outlook, expecting net sales to decrease between 3.5% and 1.5% compared to the prior year[11] - Diluted EPS guidance for 2024 is projected to be between $16.50 and $17.30[11] - Net sales for the thirteen weeks ended September 28, 2024, were $1,020,175, a decrease of 2.9% compared to $1,050,295 for the same period in 2023[15] - Gross profit for the thirteen weeks ended September 28, 2024, was $301,693, down from $315,111 in the prior year, resulting in a gross margin of 29.5% compared to 30.0%[15] - Operating income for the thirteen weeks ended September 28, 2024, was $125,735, a significant recovery from an operating loss of $(24,190) in the same quarter of 2023[15] - Net earnings attributable to Valmont Industries, Inc. for the thirteen weeks ended September 28, 2024, were $83,068, compared to a net loss of $(49,028) in the prior year[15] - The company reported earnings per share (EPS) of $4.13 for the thirteen weeks ended September 28, 2024, compared to a loss per share of $(2.34) in the same period last year[15] - Total sales for the thirty-nine weeks ended September 28, 2024, were $2,178,782, a slight decrease from $2,182,271 for the same period in 2023[19] - Net earnings for the thirty-nine weeks ended September 30, 2023, were $114,888, with diluted earnings per share of $5.40[25] Segment Performance - Infrastructure segment sales were $758.6 million, with utility sales growing nearly 15% due to a favorable project mix[5][6] - Agriculture segment sales decreased by 11.1% year over year to $265.3 million, impacted by lower grain prices and reduced volumes in North America and Brazil[8] - Operating income for the Agriculture segment was $28.9 million, or 11.0% of net sales, compared to an operating loss of ($99.7) million in Q3 2023[9] - Infrastructure segment net sales increased slightly to $756,370 for the thirteen weeks ended September 28, 2024, from $753,626 in the prior year, with a gross profit margin improvement to 29.5%[16] - Agriculture segment net sales decreased to $263,805 for the thirteen weeks ended September 28, 2024, down from $296,669 in the same period last year, with a gross profit margin decline to 29.7%[16] Cash Flow and Debt Management - The company reduced borrowings on its revolving credit facility by approximately $120 million this quarter, totaling a year-to-date reduction of approximately $210 million[10] - Cash flows from operating activities for the thirty-nine weeks ended September 28, 2024, were $379,264, compared to $190,868 for the same period in 2023[22] - Cash and cash equivalents at the end of the period were $200,477, down from $203,041 at the beginning of the period[22] Assets and Liabilities - Total assets increased to $3,496,828 as of September 28, 2024, from $3,477,448 as of December 30, 2023[21] - Total liabilities decreased to $1,909,024 as of September 28, 2024, from $2,060,376 as of December 30, 2023[21] Impairment and Charges - The company incurred impairment charges of $140,844 in the previous year, which were not repeated in the current quarter, contributing to improved operating results[15] - The company experienced an impairment of goodwill and other intangible assets amounting to $140,844 during the thirteen weeks ended September 30, 2023[25] - Impairment of goodwill and other intangible assets totaled $140,844 million[29] - Realignment charges amounted to $4,180 million during the period[29] Strategic Focus - The company plans to focus on realignment strategies following significant adjustments related to the Prospera segment[24]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Valmont Industries (VMI) being highlighted as a strong candidate due to its favorable growth metrics and Zacks Rank [1][6]. Earnings Growth - Valmont Industries has a historical EPS growth rate of 20.5%, with projected EPS growth of 12.8% for the current year, significantly outperforming the industry average of -11.7% [3]. Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 7.7%, surpassing the industry average of 6.8%. Additionally, Valmont's annualized cash flow growth rate over the past 3-5 years stands at 9.1%, compared to the industry average of 6.8% [4]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Valmont, with the Zacks Consensus Estimate for the current year increasing by 0.1% over the past month, indicating favorable near-term stock price movements [5]. Overall Positioning - Valmont Industries holds a Zacks Rank of 1 (Strong Buy) and a Growth Score of A, positioning it well for potential outperformance in the growth stock category [6].

Core Viewpoint - Valmont Industries has shown significant stock performance, with an 11.2% increase over the past month and a 33.1% rise since the beginning of the year, outperforming both the Zacks Industrial Products sector and the Zacks Steel - Pipe and Tube industry [1] Financial Performance - Valmont has consistently exceeded earnings expectations, reporting an EPS of $4.76 against a consensus estimate of $4.04 in its last earnings report [2] - For the current fiscal year, Valmont is projected to achieve earnings of $16.88 per share on revenues of $4.05 billion, reflecting a 12.68% increase in EPS despite a 2.93% decline in revenues [2] - The next fiscal year forecasts an EPS of $17.74 and revenues of $4.18 billion, indicating year-over-year changes of 5.11% and 3.09%, respectively [2] Valuation Metrics - Valmont's stock trades at 18.4 times the current fiscal year EPS estimates, which is above the peer industry average of 17.8 times [4] - On a trailing cash flow basis, the stock is valued at 15.6 times compared to the peer group's average of 11.5 times, suggesting it is not among the top value stocks [4] Zacks Rank and Style Scores - Valmont holds a Zacks Rank of 1 (Strong Buy) due to rising earnings estimates, indicating strong potential for future performance [5] - The company has a Value Score of C, a Growth Score of A, and a Momentum Score of C, resulting in a combined VGM Score of B, which aligns with investment strategies favoring stocks with strong growth potential [3][5]

Core Insights - The global precision irrigation market was valued at approximately US$3 Billion in 2023 and is projected to grow to US$4.1 Billion by 2030, reflecting a compound annual growth rate (CAGR) of 4.4% from 2023 to 2030 [1][13]. Market Overview - Precision irrigation is an advanced agricultural technique that optimizes water application based on real-time data and specific field conditions, contrasting with traditional methods that apply water uniformly [2]. - The technology encompasses various systems such as sprinkler, drip, and boom systems, utilizing sensors, GPS, satellite imagery, and data analytics to enhance water management [2][3]. Technological Advancements - The integration of IoT devices and wireless sensor networks has improved the accuracy of soil moisture monitoring, enabling real-time irrigation decisions [3]. - Advanced algorithms and machine learning models are utilized to predict irrigation needs based on crop type, growth stage, and weather forecasts [3][4]. - Satellite and drone imagery facilitate precise mapping of field variability, enhancing the efficiency and accessibility of precision irrigation [4]. Applications and Benefits - Precision irrigation is applied across various sectors, including arable farming, horticulture, and viticulture, optimizing water use for crops and supporting high-value crop production [5]. - Key benefits include water conservation, improved crop yield and quality, reduced energy and labor costs, and minimized environmental impact [6]. Market Growth Drivers - The market growth is driven by increasing awareness of water scarcity and the need for sustainable water management in agriculture [7]. - Technological advancements that enhance irrigation system efficiency and automation are significant contributors to market expansion [8]. - Government initiatives promoting water conservation and advanced agricultural technologies further support market growth [8]. Regional Insights - The U.S. precision irrigation market was estimated at approximately US$818.5 Million in 2023, while China's market is forecasted to grow at a CAGR of 7.3% to reach US$861.7 Million by 2030 [9]. - The crop-based application segment is expected to reach US$3.6 Billion by 2030, growing at a CAGR of 4.6%, while the non-crop-based application segment is projected to grow at a 3.0% CAGR [9]. Key Players - Major players in the precision irrigation market include Agsmart Pty Ltd., EPC Industrie' Ltd., Grodan (ROCKWOOL B.V.), Jain Irrigation Systems Ltd., and others [16].