Valmont Industries Inc. (VMI), a maker of lightning poles and support structures, posted a higher quarterly profit of $1.14 per share from last year’s $1.09. Earnings were also ahead of the Zacks Consensus Estimate of $1.10.

Net earnings increased despite a 20% decline in sales to $398.6 million as demand for the company’s products fell across its business segments. Valmont’s earnings were helped by lower costs that boosted margins. Cost of sales dropped by 25% to $276.0 million in the quarter.
 
For fiscal 2009, net earnings were $5.73 per share, compared with $5.04 in fiscal 2009. Sales were $1.8 billion, down 5% from $1.9 billion in 2008.
 
Utility Support Structures

Sales decreased 12.9% to $129.8 million compared with $149.0 million in 2008, driven by lower levels of capital spending by North American utilities on transmission structures, and somewhat lower sales in China. Operating income increased 14.3% to $27.7 million and was 21.3% of sales. The improvement in operating income, despite lower sales, was mainly due to lower material costs.
 
Engineered Support Structures

Fourth quarter sales were $156.1 million, a decrease of 15.0% from $183.7 million in 2008. In North America, lighting and traffic sales were lower due to decreased federal and state highway spending. Lack of a new federal highway bill and tight state budgets have constrained highway spending. Weak construction markets dampened sales of commercial lighting products.

Canadian lighting and traffic markets were stronger, somewhat aided by government stimulus programs. Global sales of wireless structures declined due to weak market conditions. Operating income increased 65.2% to $15.2 million or 9.7% of segment sales. The improvement in operating income was due to operational improvements and favorable impact of lower steel costs.
 
Irrigation

Sales decreased 32.0% to $82.8 million compared with $121.8 million in 2008. In North America, the sales decrease resulted from a late harvest that delayed the start of the fall selling season. International sales were weak due to lower levels of farm income compared with 2008 and tighter credit conditions.

Operating income declined 34.4% to $7.6 million and was 9.2% of segment sales. The impact of lower sales on operating income was somewhat offset by lower material costs and factory cost control measures.

Coatings

Sales of $27.2 million were 15.7% below last year’s $32.3 million. The sales decrease reflects reduced customer activity due to the economic recession. Operating income decreased 31.6% to $4.7 million, or 17.3% of segment sales.
 
Valmont expects first-quarter of 2009 to be particularly weak, as harsh weather has impaired shipping and outdoor activity in all of its end markets. Valmont also expects 2010 profit to drop by about 25% from 2009.

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