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Lindsay (LNN) Q1 Earnings & Revenues Miss Estimates, Down Y/Y

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Lindsay Corporation (LNN - Free Report) delivered adjusted net earnings per share of 49 cents in first-quarter fiscal 2021 (ended as of Nov 30, 2020), missing the Zacks Consensus Estimate of 76 cents. The bottom-line figure also plunged 36.4% year over year.

Including one-time items, net earnings for the reported quarter came in at 65 cents per share compared with the prior-year quarter’s 77 cents.

Lindsay generated revenues of $108.5 million compared with the $109.4 million reported in the year-ago quarter. The top-line figure also lagged the Zacks Consensus Estimate of $113 million.

The company’s backlog at the end of the reported quarter was $89.2 million compared with the $69.2 million witnessed at the end of the year-earlier quarter.

Operational Update

Cost of operating revenues went up 2.7% year on year to $77 million. Gross profit declined 8.8% to $31 million from the year-earlier quarter. Gross margin came in at 28.5% compared with the year-ago quarter’s 31%.

Operating expenses flared up 9% year over year to $24 million in the fiscal first quarter. The company recorded an operating income of $7.5 million, down 37.5% from the $12.3 million seen in the prior-year quarter. Operating margin came in at 7% in the reported quarter compared with the 11% recorded in the year-earlier period.

Lindsay Corporation Price, Consensus and EPS Surprise

Lindsay Corporation Price, Consensus and EPS Surprise

Lindsay Corporation price-consensus-eps-surprise-chart | Lindsay Corporation Quote

Segment Results

The Irrigation segment revenues increased 4.8% year over year to $87 million during the fiscal first quarter. North America irrigation revenues edged down 1.8% from the year-ago quarter to $53 million primarily due to lower engineering services revenues related to a project in 2020 that did not repeat in fiscal first quarter. This was, however, partly offset by higher irrigation equipment unit volume. International irrigation revenues climbed 16.2% year on year to $34.6 million on higher sales volumes in certain regions. These were partly negated by the unfavorable impact of foreign-currency translation. The segment’s operating income went up 9.2% year over year to $10.6 million.

The Infrastructure segment revenues declined 19.2% year over year to $21 million due to large order delivered in 2020 that did not repeat in fiscal first quarter as well as lower road construction activity. The segment reported an operating income of $4.3 million compared with the prior-year quarter’s $8.7 million.

Financial Position

Lindsay had cash and cash equivalents of $127 million at the end of the fiscal first quarter compared with the $121 million witnessed at the end of the prior-year quarter. The company’s long-term debt stood at $116 million at the end of the fiscal first quarter, flat year on year.

Outlook

The company anticipates solid revenue growth in the fiscal second quarter on solid order backlogs of its irrigation equipment in North America. Lindsay expects improved activity levels in the international irrigation markets. In fact, the irrigation market is gaining from the rising agricultural commodity prices and higher projected net farm income.

The company’s infrastructure business will continue to gain from Road Zipper systems sales. However, significant increases in steel and freight costs might dent the company’s margins until implementation of pricing actions.

Price Performance

Lindsay’s shares have gained 30.5% over the past three months, outperforming the industry’s growth of 24.8%.



Zacks Rank & Other Stocks to Consider

Lindsay currently carries a Zacks Rank #2 (Buy).

Other top-ranked stocks in the Industrial Products sector include AGCO Corporation (AGCO - Free Report) , Crown Holdings, Inc. (CCK - Free Report) and Ball Corporation (BLL - Free Report) , each carrying a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AGCO has a long-term earnings growth rate of 13.2%. The stock has appreciated 42% in three months’ time.

Crown Holdings has a long-term earnings growth rate of 5%. Shares of the company have gained 24.8% in the past three months.

Ball Corp has a long-term earnings growth rate of 5%. Over the past three months, the company’s shares have gained 12.1%.

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