OMAHA, Neb., Oct. 23, 2018 — Valmont Industries Inc., a global provider of engineered products and services for infrastructure development and irrigation equipment and services for agriculture, today reported third quarter 2018 results.
Revenue of $678.7 million was down slightly compared to last year, as revenue gains in the Engineered Support Structures, Utility Support Structures and Coatings segments were offset by lower sales in Irrigation and unfavorable currency impacts of $12.6 million (1.9% of sales).
North America Irrigation sales growth was driven by higher volumes and recent acquisitions, supported by increased sales of advanced, integrated technology solutions, offset by extended project timeframes and lower revenues in Brazil, which led to lower sales in international markets
Excluding 2017 grinding media revenue of $19.8 million, third-quarter revenue from continuing operations grew 2.7%
“Our emphasis on pricing actions and operational improvements positioned us well to achieve good operating profit growth this quarter, despite an inflationary environment and enacted tariffs,” said Stephen G. Kaniewski, president and CEO. “Consistent with our focus on capital deployment, we completed three acquisitions that advance our growth strategy into adjacent markets, and repurchased $43 million of shares in the third quarter. We believe the actions we've taken this year to optimize our operational footprint and supply chain should leave us well-positioned by year-end 2018 to further execute on our addressable market growth strategy.”
Irrigation Segment (21% of Sales)
Agricultural irrigation equipment, parts, services and tubular products, water management solutions, and technology for precision agriculture
Global sales of $140.2 million were 4.9% below last year. Sales grew in North America, while sales in international markets were lower.
North America revenues increased more than 16%, despite continued market uncertainty from tariffs and trade policies, and low net farm income levels. Sales from Torrent Engineering, acquired earlier this year, contributed to favorable comparisons. The Company's strategy to drive adoption of its advanced technology products and services also led to higher sales, including the recent North American expansion of its Valley Scheduling advanced irrigation management solution.
International sales were down 23% compared to last year, due to lower volumes in emerging markets and unfavorable currency translation impacts. Excluding currency effects, sales were down 17%. While market demand in Brazil remains strong, extended approvals for government-sponsored financing programs and uncertainty of current political outcomes, also negatively impacted sales in that region.
Operating income was higher at $21.3 million, or 15.2% of sales, compared to $18.2 million, or 12.4% of sales in 2017. Successful price recovery of steel cost inflation and improved pricing actions were partially offset by decreased operating leverage and currency impacts.