Earnings Preview: Lindsay Corp.

Lindsay Corporation ( LNN - Analyst Report ) is slated to report its third-quarter 2012 results before the market opens on June 27. The Zacks Consensus Estimate for the quarter is $1.37 per share, representing an estimated year-over-year increase of 13.89%. Revenues, as per the Zacks Consensus Estimate, are $166 million.

Second Quarter Synopsis

The company, in the second quarter (ended February 29, 2012), reported earnings of $1.00 per share, beating both the Zacks Consensus Estimate of 83 cents and year-ago earnings of 89 cents.

Revenues in the reported quarter increased 10% year over year to $132.1 million, comfortably surpassing the Zacks Consensus Estimate of $129 million.

Lindsay experienced growth in its top line, driven by an increase in total irrigation equipment revenues by 28% to $117 million year over year. This was attributable to a rise in domestic as well as international irrigation revenues.

Estimate Revision Trend

Agreement

Out of the 9 analysts covering the stock, none have revised their estimates for the third quarter in either direction over the last 7 and 30 days. A similar trend applies for fiscal 2012.

Magnitude

The Zacks Consensus Estimates remained the same for both the third quarter and fiscal 2012 over the last 7 and 30 days.

Earnings Surprise History

With respect to earnings surprise, Lindsay has topped the Zacks Consensus Estimate in three of the last four quarters while it missed the consensus estimate on one occasion. The company has delivered an average positive earnings surprise of 11.95% over the preceding four quarters, implying that it has beaten the Zacks Consensus Estimate by that measure.

Our Take

Lindsay is experiencing positive demand for irrigation equipment due to increased food production and efficient water use. High commodity prices and farm income are driving positive farmer sentiments, benefiting Lindsay’s irrigation segment. We expect increased demand for food production, driven by worldwide population growth and efficient water use will benefit Lindsay in the long term.

The infrastructure segment, however, may face challenges due to uncertainty regarding the new highway bill. The bill has just been extended for the ninth time instead of formulating a new one. In addition, tight credit conditions and soft consumer confidence remain headwinds for the segment.

Lindsay retains a short-term Zacks #3 Rank (Hold). We have a long-term Neutral recommendation on the stock.

Lindsay is a leading designer and manufacturer of self-propelled center pivot and lateral move irrigation systems, which are used principally for agriculture to increase or stabilize crop production while conserving water, energy and labor. Lindsay maintains its corporate offices in Omaha, Nebraska. The company competes with Valmont Industries Inc. ( VMI - Analyst Report ) .