Lindsay (LNN) Earnings Beat Estimates in Q2, Revenues Dip Y/Y
Lindsay Corporation LNN delivered earnings per share of $1.63 in second-quarter fiscal 2023 (ended as of Feb 28, 2023), beating the Zacks Consensus Estimate of $1.32. The bottom line rose 23% year over year on increased operating income.
Lindsay generated revenues of $166 million, down 17% from the $200 million reported in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $188 million.
The company’s backlog as of Feb 28, 2023, was $95 million compared with $111 million as of Feb 28, 2022.
Lindsay Corporation Price, Consensus and EPS Surprise
Lindsay Corporation price-consensus-eps-surprise-chart | Lindsay Corporation Quote
Operational Update
The cost of operating revenues fell 28.8% year over year to $112 million. The gross profit was up 26.3% to $54 million from the year-earlier quarter. The gross margin was 32.6% compared with the year-ago quarter’s 21.5%.
Operating expenses were $27 million in the fiscal second quarter, up 9% year over year. Operating income was $27 million, up from the prior-year quarter’s $18 million.
Segmental Results
The Irrigation segment’s revenues decreased 18% year over year to around $148 million in the fiscal second quarter. North America irrigation revenues fell 10% from the year-ago quarter to $90 million, primarily on lower unit sales volumes. International irrigation revenues declined 28% year over year to $57 million on lower sales volumes in Brazil, Ukraine and Russia. The segment’s operating income increased 33% year over year to $32.8 million.
The Infrastructure segment’s revenues declined 5% year over year to $18.5 million on lower Road Zipper System sales and lease revenues. The segment reported an operating income of $2 million compared with the $0.3 million reported a year ago. The upside was caused by a more favorable margin mix of revenues, improved price realization and lower inflationary impact on input costs.
Financial Position
Lindsay had cash and cash equivalents of nearly $98 million at the end of the fiscal second quarter compared with $69 million at the prior-year quarter’s end. The company’s long-term debt stood at around $115 million at the end of the fiscal second quarter, flat year over year.
Outlook
Even though domestic net farm income in 2023 is expected to fall from record levels reported in 2022, overall income is high. The company expects this to support further investments in irrigation equipment.
Increased production will support demand strength in the international market, driven by positive agricultural market fundamentals and ongoing global concerns about food security and global grain supplies. However, the company anticipates some of the effects of market delays in Brazil to persist in the fiscal third quarter. Nonetheless, the full-year outlook has been unchanged.
Price Performance
Lindsay’s shares have declined 8.5% in the past year compared with the industry’s fall of 1.1%.
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Zacks Rank & Stocks to Consider
Lindsay currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are OI Glass OI, Encore Wire WIRE, and Illinois Tool Works ITW. OI and WIRE flaunt a Zacks Rank #1 (Strong Buy) at present, and ITW has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
OI Glass has an average trailing four-quarter earnings surprise of 16.4%. The Zacks Consensus Estimate for OI’s 2023 earnings is pegged at $2.57 per share. This indicates an 11.7% increase from the prior-year reported figure. The consensus estimate for 2023 earnings has moved 16% north in the past 60 days. OI’s shares gained 74.1% in the last year.
Encore Wire has an average trailing four-quarter earnings surprise of 146.8%. The Zacks Consensus Estimate for WIRE’s 2023 earnings is pegged at $19.76 per share. The consensus estimate for 2023 earnings has moved north by 1.7% in the past 60 days. Its shares gained 61.3% in the last year.
The Zacks Consensus Estimate for Illinois Tool Works’ fiscal 2023 earnings per share is pegged at $9.61, suggesting an increase of 4.8% from that reported in the last year. The consensus estimate for fiscal 2023 earnings rose 4% in the last 60 days. ITW has a trailing four-quarter average earnings surprise of 0.9%. Its shares gained 16.9% in the last year.
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