Lindsay (LNN) Q4 Earnings Beat Estimates, Revenues Dip Y/Y
Lindsay Corporation LNN delivered adjusted earnings per share of $1.74 in fourth-quarter fiscal 2023, beating the Zacks Consensus Estimate of $1.15. The bottom line improved 7% year over year as strong international irrigation results helped offset the decline in irrigation revenues in North America and in the infrastructure segment.
Lindsay generated revenues of $167 million, down 12% from the $190 million reported in the year-ago quarter. However, the top line surpassed the Zacks Consensus Estimate of $161 million.
The company’s backlog as of Aug 31, 2023, was $78.7 million compared with $96.8 million as of Aug 31, 2022.
Operational Update
The cost of operating revenues fell 13.8% year over year to $114.6 million. Gross profit decreased 8.1% to $52.5 million from the year-earlier quarter. The gross margin was 31.4% compared with the year-ago quarter’s 30%.
Operating expenses were $29 million in the fiscal fourth quarter, unchanged year over year. Operating income was $23.4 million, down from the prior-year quarter’s $27.8 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 5% year over year to around $144 million in the fiscal fourth quarter. We projected revenues of $135 million for the quarter. North America irrigation revenues decreased 25% from the year-ago quarter to $60 million due to lower unit sales volumes. The International irrigation segment’s revenues increased 18% year over year to $83 million.
The irrigation segment’s operating income rose 23% year over year to $29.8 million. Our estimate for the segment’s operating income was $17.1 million. The variance was owing to increased sales volumes in Brazil, Argentina and the Middle East.
The Infrastructure segment’s revenues decreased 41% year over year to $23.5 million on lower Road Zipper System sales. Our model predicted the segment’s revenues to be $23 million in the quarter. It was somewhat offset by an increase in Road Zipper System lease revenues. The segment reported an operating income of $3.1 million, down 73% year over year. We expected an operating income of $8 million.
FY23 Results
The company delivered a record adjusted earnings per share of $6.54 in fiscal 2023, beating the Zacks Consensus Estimate of $5.94. The bottom line improved 10% year over year.
Lindsay generated revenues of $674 million, down 13% from the $771 million reported in the year-ago quarter. However, the top line surpassed the Zacks Consensus Estimate of $668 million.
Financial Position
Lindsay had cash and cash equivalents of $161 million at the end of fiscal 2023 compared with $105 million at the end of the prior fiscal year. The company’s long-term debt stood at around $115 million at the end of the fiscal fourth quarter, flat with the prior-year quarter’s end.
Outlook
For the first quarter of fiscal 2024, the company expects sales volume levels in developed international markets to remain solid, backed by strong demand in Brazil. Lindsay continues to see project opportunities in developing markets, led by the ongoing global concerns over food security and global grain supplies.
Price Performance
Lindsay’s shares have lost 21.1% in the past year compared with the industry’s decline of 0.7%.
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Zacks Rank & Stocks to Consider
LNN currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Applied Industrial Technologies AIT, Astec Industries, Inc. ASTE, and Albany International AIN. AIT sports a Zacks Rank #1 (Strong Buy), and ASTE and AIN have a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIN’s 2023 earnings is pegged at $2.07 per share. The consensus estimate for 2023 earnings has been unchanged in the past 60 days. Its shares gained 41.5% in the last year.
Astec has an average trailing four-quarter earnings surprise of 20%. The Zacks Consensus Estimate for ASTE’s 2023 earnings is pegged at $2.81 per share. The consensus estimate for 2023 earnings has moved 4% north in the past 60 days. ASTE’s shares gained 22.8% in the last year.
The Zacks Consensus Estimate for Albany International’s 2023 earnings per share is pegged at $3.62. The consensus estimate for 2023 earnings has moved 1% north in the past 60 days. It has a trailing four-quarter average earnings surprise of 12.5%. Shares of AIN rallied 3% in the last year.
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