Valmont Industries, Inc. (VMI) Earnings & Analysis

Latest quarter

Valmont reported Q3 FY2026 revenue of $1.1 billion, below the consensus, while adjusted earnings per share of $6.24 beat the $5.70 consensus. Revenue rose 5.53% from $1.0 billion a year earlier, and diluted earnings per share increased from $4.98.

The company attributed the sales increase primarily to Infrastructure, particularly North American utility products, partly offset by lower international Agriculture sales. CFO John Schwietz said Infrastructure sales reached $882.1 million, while Agriculture sales fell to $226.0 million. Valmont’s filing attributed the international Agriculture decline primarily to Middle East conflict disruptions and lower volumes in Brazil.

Valmont reported a gross margin of 30.0%, compared with 30.4% a year earlier, while operating margin rose to 15.7% from 13.5%. Its filing attributed the increase in operating income to higher gross profit and lower selling, general and administrative expenses, including lower expected credit losses and litigation costs.

Free cash flow was $55.2 million, down from $71.4 million a year earlier. Schwietz said quarterly operating cash flow included $40 million of accelerated receivable collections.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Avner Applbaum said utility customers were modernizing the grid and adding capacity as power demand grew. More opportunities converted into orders during the quarter, taking Infrastructure backlog to $1.8 billion. Asked about the backlog, he said most of its increase related to utilities and that the pipeline with alliance customers had also grown. He said Valmont was booking orders well into 2028.

Applbaum said Valmont had commissioned approximately 20% of the incremental utility steel production capacity needed for its 2029 plan and expected to double growth capital investment in 2027 compared with this year. Asked about competing capacity additions, he said industry demand still exceeded supply and pointed to Valmont’s engineering expertise and delivery record.

CFO John Schwietz said steel costs were reaching results before contractual price adjustments because of the size and duration of the utility backlog. He said the catch-up process usually takes two to three quarters. Asked about the next quarter, Schwietz said input-cost inflation had accelerated and he expected more margin pressure in Q4. Applbaum added that higher prices were intended mostly to offset steel costs rather than flow entirely into profit.

In Agriculture, Schwietz said storm-related replacement orders were substantially responsible for North American growth. Asked about the segment’s margin, he said about $7 million of one-time benefits mainly related to South American recoveries; excluding those items, the operating margin was just above 14%. He expected a return to a more normal regional sales mix to pressure the margin in Q4 compared with Q3.

Applbaum said the Middle East conflict and shipping costs continued to delay activity, while Valmont had secured a $100 million North African project with shipments expected to begin in the first half of 2027. On telecom, he said carriers were delaying site modifications and that Valmont had limited visibility into the timing of a recovery.

Guidance

After reporting its third-quarter results, Valmont raised its full-year FY2026 guidance for adjusted diluted earnings per share to $22.75 to $23.75, compared with its previous range of $22.25 to $23.50, according to CFO John Schwietz on the earnings call.