Valmont Industries Inc. (VMI) announced that its board of directors has authorized an additional repurchase of $250 million worth of its outstanding shares. The company had about $55 million remaining under its previous $500 million share buyback program, as of Feb 24, 2015. The new authorization does not have an expiration date.
Valmont will fund the buyback from available cash flows and cash balances, subject to market and economic conditions. It is not mandatory for Valmont to make any repurchases and may discontinue the program at any time. The company has about 23.9 million shares outstanding. Shares repurchased will be available for general corporate purposes, including acquisitions.
Last week, Valmont released its fourth-quarter 2014 results. The company posted a profit of $40.5 million or $1.66 per share in the quarter, down 26.3% from $54.9 million or $2.04 per share earned in the year-ago quarter. Fourth-quarter adjusted earnings (excluding non-recurring items) were $1.62, which missed the Zacks Consensus Estimate of $1.66.
Valmont, which is among the prominent steel-pipe and tube companies along with MRC Global Inc. (MRC), Mueller Water Products, Inc. (MWA) and Tenaris SA (TS), registered revenues of $763.1 million in the quarter, down 7.8% from $827.9 million in the year-ago quarter. The decrease was mainly due to weaker conditions in the company’s irrigation and utility markets. Sales lagged the Zacks Consensus Estimate of $788 million.
Looking ahead, Valmont expects difficult market environment to continue in 2015. The company expects the results of the Irrigation segment to be affected by lower commodity prices and large inventories of major crops such as corn and soybeans.
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