Lindsay Q3 Profit Falls, Sees Lower Demand In Near Term - Update

(RTTNews) - Irrigation equipment maker Lindsay Corp. (LNN) Wednesday reported a sharp decline in third-quarter profit, as irrigation equipment revenues fell 26 percent mainly due to lower crop prices. Earnings per share as well as revenues missed analysts' estimates.

The company anticipates a continuation of lower agricultural equipment demand in the near term, but said it has implemented appropriate expense controls.

Rick Parod, president and chief executive officer said, "Lower commodity prices led to decreases in irrigation sales throughout North America during the primary selling season...The lower crop prices, along with the reduction in the Sec. 179 tax benefits, create a headwind for irrigation equipment demand as compared to the previous year."

For the third quarter ended May 31, 2014, the company posted net earnings of $16.50 million or $1.28 per share, lower than $26.06 million or $2.01 per share in the prior year.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $1.43 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter dropped to $169.94 million from $219.54 million in the same period last year and missed consensus estimate of $184.29 million.

Total irrigation equipment revenues fell 26 percent to $149 million from $200.9 million in the prior year, mainly due to lower crop prices. Both U.S. irrigation revenues, as well as international irrigation revenues declined 26 percent from the preceding year.

Infrastructure revenues increased 13 percent to $20.9 million with increases in road safety, rail and Road Zipper product lines.

Total operating expenses were $23.03 million, compared with $23.49 million a year ago.

Operating margins were 14.8 percent, down from 18.0 percent in the year-ago period.

Backlog of unshipped orders as at May 31, 2014 was $73.6 million, down from $80 million last year.

LNN closed Tuesday's regular trading at $88.05 on the NYSE.