Booming farm income in North America and around the world, and sustained high commodity prices have kept demand for irrigation equipment steady.
During a conference call Wednesday, the Valley, Neb.-based company's chief executive and board chairman, Moegens Bay, said he was "very pleased" with Valmont's irrigation equipment sales and said high demand should continue as global food demand and high farm profitability continues.
"We're off to a very strong start for the year," Bay said. "We should have a very strong first quarter."
In the fourth quarter of 2011, significantly higher demand for irrigation and utility equipment and for metal coatings more than tripled fourth-quarter net income for Valmont Industries, leading to record revenue and profits.
The Valley-based company said Tuesday that record farm income and favorable weather in the United States raised demand for irrigation equipment, including center-pivot systems. In addition, the country's expanding transmission grid led to higher sales in Valmont's Utility Support Structures division.
For the three-month period, net income was $114.7 million, or $4.33 per share, versus $34.9 million and $1.32 per share last year. Full-year 2011 net income was $228.3 million, or $8.60 per share, compared with $94.4 million and $3.57 for all of 2010.
"Valmont posted another record year in 2011," said Mogens Bay, the company's board chairman and chief executive officer. "Results were outstanding in the irrigation segment, and the utility support structures and coatings segments substantially contributed to full-year performance gains.
"However, our largest segment, engineered infrastructure products, faced headwinds during the year."
Sales in the infrastructure products division increased 5 percent from a year ago to $220 million. Reduced government funding for infrastructure cut into North American demand, Bay said.
Utility support structures, the company's second-largest division, grew 63 percent to $202.8 million over the same quarter last year. Irrigation equipment sales increased 34 percent to $180.6 million.
Valmont's coatings division, which is made up primarily of operations from the acquired London company Delta PLC and includes galvanized steel and other metal treatment products, had sales of $88.9 million, up 11 percent from last year.
"I probably couldn't be more pleased with how the Delta businesses are settling into Valmont," Bay said.
The company expects 2012 revenue to grow by 10 percent and earnings per share to be between $7.30 and $7.60 per share.
Contact the writer:
402-444-1414, ross.boettcher@owh.com
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