Valmont Reorganizes, Guides High - Analyst Blog
21 Diciembre 2011 - 6:30AM
Zacks
Valmont Industries,
Inc. (VMI) announced that it will record a one-time
earnings benefit of about $2.66 a share in the fourth quarter after
the company reorganized its Delta business to take advantage of
losses it can write off from taxes.
The company also raised its
full-year earnings guidance, indicating that profit will modestly
exceed its previously forecast range of $5.70 to $5.90 per share
due to stronger performance in all its main business segments.
Valmont had previously forecast earnings at the middle to low end
based on economic uncertainty in Europe.
Valmont announced that it has
reduced its tax burden by legally merging its Delta businesses in
the U.S. with the parent company while organizing Delta's Asia
Pacific entities directly under Valmont's Australian business. The
simplified structure will allow the company to recognize certain
tax-losses from the company it acquired in 2010.
As per the company, the move will
save about $4.3 million in cash a year for the next 12 years,
though the company does not expect any significant change to its
tax rate going forward, offset by the deferred tax expenses.
Most of the new one-time gain came
from a $2.70 per share benefit from the value of the newly
recognized tax loss carry-forwards, as well as from higher income
tax basis on Valmont's Australian assets.
According to Valmont, a separate
insurance settlement for fire and storm damage at an Australian
galvanizing facility will boost fourth-quarter earnings by about 9
cents a share.
At the same time, the company
slashed the carrying value of some trade names, adding a charge of
9 cents per share to the fourth quarter. Valmont also reorganized
its pole operations in Europe to reduce overhead costs, prompting a
charge of 4 cents a share for the fourth quarter.
Recently, the company posted its
third-quarter 2011 net earnings of $1.59 per share, an increase of
62% from last years’ $0.98.
Quarterly revenues, however, jumped
27.4% year over year to $672.2 million. The third- quarter results
were driven by a significant growth in Irrigation Segment sales,
increased revenue in every segment and strong market
fundamentals.
Currently, Valmont has short-term
(1 to 3 months) Zacks #3 Hold rating and a long-term (6 months)
Neutral recommendation.
The company faces stiff competition
from Lindsay Corporation (LNN) and Thomas
and Betts Corp. (TNB).
LINDSAY CORP (LNN): Free Stock Analysis Report
THOMAS & BETTS (TNB): Free Stock Analysis Report
VALMONT INDS (VMI): Free Stock Analysis Report
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