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Why Is Lindsay (LNN) Up 2.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for Lindsay (LNN - Free Report) . Shares have added about 2.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Lindsay due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Lindsay Q2 Earnings & Revenues Beat Estimates, Up Y/Y

Lindsay delivered earnings per share of $1.08 in second-quarter fiscal 2021, beating the Zacks Consensus Estimate of 88 cents. The bottom-line figure surged 111.7% year over year. Improved agricultural market conditions driven by higher commodity prices contributed to the quarterly results.

Lindsay generated revenues of $144 million compared with the $114 million reported in the year-ago quarter. The top-line figure also surpassed the Zacks Consensus Estimate of $129 million.

The company’s backlog at the end of the reported quarter was $101.4 million compared with the $104.4 million witnessed at the end of the year-earlier quarter.

Operational Update

Cost of operating revenues went up 28% year on year to $102 million. Gross profit climbed 24.2% to $41 million from the year-earlier quarter. Gross margin came in at 28.4% compared with the year-ago quarter’s 29%.

Operating expenses flared up 2.4% year over year to $25.3 million during the fiscal second quarter. The company recorded an operating income of $16 million, suggesting year-over-year growth of 83.7%. Operating margin came in at 10.4% in the reported quarter compared with the 7.5% recorded in the prior-year period.

Segment Results

The Irrigation segment revenues increased 28% year over year to $119 million during the fiscal second quarter. North America irrigation revenues jumped 19.4% from the year-ago quarter to $80 million, primarily on greater irrigation equipment unit sales volume and higher average selling prices. International irrigation revenues climbed 46.1% year on year to $38.4 million on higher unit sales volumes in in several international markets. The segment’s operating income soared 80% year on year to $18 million.

The Infrastructure segment revenues climbed 25% year over year to $25 million on higher Road Zipper System sales and lease revenues. The segment reported an operating income of $6.3 million compared with the prior-year quarter’s $5.8 million.

Financial Position

Lindsay had cash and cash equivalents of $111 million at the end of the fiscal second quarter compared with the $101 million at the end of the prior-year quarter. The company’s long-term debt stood at $116 million at the end of the fiscal second quarter, flat year on year.

Outlook

The company anticipates improved irrigation equipment demand for fiscal 2021 driven by solid farm prospects. Sales pipeline in Lindsay’s infrastructure business is robust. However, the company expects pandemic-induced delays in road construction activity and projects. Significant rise in raw material and freight costs as well as supply-chain constraints continue to dent margins.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month.

VGM Scores

At this time, Lindsay has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Lindsay has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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