Valmont Industries Smashes Estimates with Record Quarterly Profit

Diversified metals products company Valmont Industries ( VMI) posted a record quarterly profit Friday, easily beating analyst estimates and sending its shares rocketing 16%.

The Omaha, Neb.-based company, which fabricates concrete and metal products used in infrastructure, reported fiscal first-quarter profit of $35.9 million, or $1.37 per share, up 20% from $29.7 million, or $1.13 per share, in the year-ago period.

On average, Wall Street analysts expected a profit of $1.08 per share. This report marks the fifth consecutive time the company has beat earnings estimates.

Sales rose 8% in the quarter to $455.2 million, compared with $422.3 million in the same quarter last year. The company's utility support structures business saw the biggest jump, with a 74% rise in sales to $176 million.

Looking ahead, the company expects higher annual revenue in the North American utility market, but is not so optimistic about other segments. The long-term driver for the engineered support business in North America will be the renewal of the U.S. federal highway bill expected this fall, the company noted.

Valmont said it expects full-year 2009 earnings to be "only modestly lower" than last year's results.

Valmont stock rose $9.38, or 16.9%, in late-morning trading Friday.

We had removed shares of VMI on Sept. 3, when the stock was trading at $100.70. The company has a 0.94% dividend yield, based on last night's closing price of $55.30. The stock has technical support in the $46-$50 price range. If the shares can firm up, we see near-term overhead resistance around the $66-$67 levels. We would remain on the sidelines for now.

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