Lindsay (LNN) Q3 Earnings & Revenues Miss Estimates, Dip Y/Y
Lindsay Corporation LNN delivered adjusted earnings per share of $1.53 in third-quarter fiscal 2023 (ended on May 31, 2023), missing the Zacks Consensus Estimate of $2.17. The bottom line fell 33% year over year.
Lindsay generated revenues of $165 million, down 23.2% from the $214 million reported in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $210 million.
The company’s backlog as of May 31, 2023, was $94.5 million compared with $98.3 million as of May 31, 2022.
Operational Update
The cost of operating revenues fell 27% year over year to $111 million. Gross profit decreased 13.7% to $53.2 million from the year-earlier quarter. The gross margin was 32.3% compared with the year-ago quarter’s 28.8%.
Operating expenses were $26.2 million in the fiscal third quarter, down 1.1% year over year. Operating income was $26.9 million, down from the prior-year quarter’s $35 million.
Lindsay Corporation Price, Consensus and EPS Surprise
Lindsay Corporation price-consensus-eps-surprise-chart | Lindsay Corporation Quote
Segmental Results
The Irrigation segment’s revenues fell 24% year over year to around $143 million in the fiscal third quarter. North America irrigation revenues decreased 22% from the year-ago quarter to $75 million due to lower unit sales volumes.
International irrigation revenues decreased 27% year over year to $68 million on lower sales volumes in Brazil, Australia, Ukraine and Russia. The irrigation segment’s operating income fell 22% year over year to $30.7 million.
The Infrastructure segment’s revenues decreased 14% year over year to $22 million on lower Road Zipper System sales and lower sales of road safety products that more than offset an increase in Road Zipper System lease revenues. The segment reported operating income of $3.6 million, down 6% year over year.
Financial Position
Lindsay had cash and cash equivalents of $132 million at the end of the third quarter of fiscal 2023 compared with $82 million at the end of the prior-year quarter. The company’s long-term debt stood at around $115 million at the end of the fiscal third quarter, flat with the prior-year quarter’s end.
Outlook
In the fiscal fourth quarter, the company expects demand to be driven by summer crop harvest and storm damage replacement. However, this is expected to be lower than the exceptional demand experienced in the fourth quarter of fiscal 2022.
Lindsay anticipates a rise in sales volume in Brazil for the fourth quarter, aided by the recently announced new government financing program. Positive farm fundamentals and ongoing global concerns over food security and global grain supplies will continue to support demand across other foreign markets.
Price Performance
Lindsay’s shares have lost 12.9% in the past year compared with the industry’s fall of 32.7%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the Industrial Products sector are Hubbell Incorporated HUBB, The Manitowoc Company, Inc. MTW and W.W. Grainger, Inc. GWW. HUBB and MTW flaunt a Zacks Rank #1 (Strong Buy) at present, and GWW has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hubbell has an average trailing four-quarter earnings surprise of 21%. The Zacks Consensus Estimate for HUBB’s fiscal 2023 earnings is pegged at $13.81 per share. The consensus estimate for 2023 earnings has moved north by 22.5% in the past 60 days. Its shares gained 83.2% in the last year.
Manitowoc has an average trailing four-quarter earnings surprise of 38.8%. The Zacks Consensus Estimate for MTW’s 2023 earnings is pegged at 85 cents per share. The consensus estimate for 2023 earnings has moved 63.5% north in the past 60 days. MTW’s shares gained 77.7% in the last year.
The Zacks Consensus Estimate for Grainger’s 2023 earnings per share is pegged at $35.83, up 7.6% in the past 60 days. It has a trailing four-quarter average earnings surprise of 9.1%. GWW gained 71.2% in the last year.
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