I don't own this stock but I'm really curious about this huge smackdown on the great EPS and Rev. beat. What would have happened if they missed a little bit?
The only negative I've heard so far is slowing infrastructure revenues. Perhaps that's it? Market is assuming that all their over performance was due to the drought and can't be counted on in upcoming quarters?
While he didn't offer specific figures, President and CEO Rick Parod commented on Lindsay's outlook. According to Parod, “Positive farmer sentiment along with historically high farm incomes and commodity prices provide a solid backdrop for strong irrigation sales. However, expectations of record crop planting and improved yields are leading to projections of lower commodity prices, which could lead to reduced demand over the balance of 2013 and into 2014. The environment for infrastructure sales remains difficult, so we are focused on operating efficiencies and expense controls to position the segment for improved profitability as the market strengthens.”
Commenting on the company's long-term prospects, Parod noted, “Overall the long-term drivers for the company of population growth, expanded food production, efficient water use, and improved transportation infrastructure remain positive.”
Good comments. Agree -- interesting market reaction. Don't think drought was only reason for last yr's outperformance. If I recall, commodity prices were aready quite high even with record planting before the drought. The drought was icing on the cake (not to mix foodstuffs).
One add to guidance -- it was mentioned that the large Midde East irrigation project had lower margins. Some might have viewed taking a big low-margin job negatively, even if the goal is a positive (brand recognition).
I have no idea why this is selling off so strongly?? I bought a full position at 85.49. The conference call was generally positive except for the smaller part of their infrastructure business. Go figure?