Valmont Industries (VMI) Prelim. Q2 EPS Guidance Misses Views

Valmont Industries, Inc. (NYSE: VMI), a leading global provider of engineered products and services for infrastructure development and irrigation equipment and services for agriculture, today announced second quarter 2018 earnings expectations and updated full-year 2018 guidance.

Second quarter diluted earnings per share expected to be in the range of $1.50 - $1.53 (GAAP) and $1.92 - $1.95 (adjusted1)

(Street sees Q2 EPS of $2.22)

Second Quarter and Full Year Segment Expectations

Irrigation

• Continued low net farm income levels and uncertainty around impacts of tariffs and trade policies causes farmers to delay irrigation purchase decisions in North America
• The truckers strike in Brazil led to an interruption of operations, unfavorably impacting second quarter volume and profitability, and anticipated results for the full year

Engineered Support Structures

• Weakness in the China market across all product lines adversely impacted second quarter volume and profitability, and expected results for full-year 2018. Specifically, a pause in China telecom tower construction has led to significantly lower demand for new wireless communication structures
• Substantial price and volume recovery in North American telecom and lighting and traffic began in second quarter, and expected to continue through 2018
• Expect favorable 2018 segment comparisons for the second half of the year

Utility Support Structures

• A challenging competitive environment in Northern Europe has further reduced offshore wind structures demand for the balance of the year, and unfavorably impacted 2018 volume and profitability expectations
• In North America, customer requests to shift a meaningful number of projects from 2018 to 2019 have unfavorably impacted 2018 product mix and profitability expectations, but expected to improve 2019 outlook
• Lower than anticipated volume in offshore wind is offsetting 2018 revenue growth in North America

Coatings

• Segment performance in line with second quarter and full-year expectations
• Zinc cost increases have been fully recovered
• Anticipated 2018 volumes and profitability supported by improved broad-based industrial demand

"While market challenges in the second quarter have led us to adjust our revenue and profitability outlook for the full year, we remain positive on our business," said Stephen G. Kaniewski, President and CEO. "The market drivers for our Utility business remain strong, and we continue to pursue opportunities for global market expansion. We're encouraged by volume and margin improvement in Engineered Support Structures going forward. Broad-based international irrigation market demand remains strong, although volatile, and global adoption of our technology solutions is increasing. Our Coatings business has rebounded globally, and is on track to deliver good results for the year. Long-term drivers for EPS growth across all our businesses remain positive, supported by market expansion opportunities and transformational initiatives underway throughout the company."

The Company will report second quarter 2018 earnings on July 23, 2018, after market close.

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