Strong North American sales of steel and concrete structures for electric utilities helped the diversified manufacturer Valmont Industries Inc. post a 21 percent increase in first-quarter earnings.
The results reported after the market closed Thursday beat Wall Street expectations, and Valmont shares climbed $8.92, or 16.1 percent, to $64.22 in afternoon trading Friday.
For the three months ended March 28, net income rose to $35.9 million, or $1.37 per share, from $29.7 million, or $1.13 per share, a year earlier.
Sales climbed nearly 8 percent to $455.2 million from $422.3 million a year ago.
Analysts surveyed by Thomson Reuters, on average, expected profit of $1.08 per share on revenue of $454.12 million. Those estimates typically exclude one-time items.
Substantially higher sales of utility support structures and a modest increase in engineered support structures more than offset lower sales of the company's other products, Mogens C. Bay, Valmont's chairman and chief executive, said in a statement.
Customers bought less irrigation equipment because of uncertainty in the global economy and significantly lower commodity prices, while weakness in the industrial economy lowered demand for coatings services, he said.
Bay said the company was "cautious about our outlook for the balance of 2009," but expects higher annual revenues in the North American utility market.
The company's engineered support structures will not be affected by the government's economic stimulus plan, he said, and the longer-term driver of growth will be the renewal of the U.S. Federal Highway bill expected this fall.
Valmont expects revenue declines in its coatings business and continued weakness in its irrigation segment, despite farmers' relatively sound financial position.
"On balance, at this time we expect total revenues and net earnings for 2009 to be only modestly lower than 2008 levels," he said.
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