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Lindsay (LNN) Q4 Earnings Surpass Estimates, Decline Y/Y

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Lindsay Corporation (LNN - Free Report) delivered an adjusted earnings per share of 94 cents in fourth-quarter fiscal 2021 (ended as of Aug 31, 2021), beating the Zacks Consensus Estimate of 83 cents. However, the bottom line declined 30% year over year as the impact of higher sales in the Irrigation segment was partially offset by rising raw material and other costs, and lower sales in the infrastructure segment.

Including one-time items, earnings per share was 53 cents in the quarter compared with $1.35 in the prior-year quarter.

Lindsay generated revenues of $154 million, up 20% from $128 million reported in the year-ago quarter. The top line surpassed the Zacks Consensus Estimate of $147 million.

The company’s backlog as of Aug 31, 2021 was $149.1 million compared with $58.7 million witnessed as of Aug 31, 2020.

Lindsay Corporation Price, Consensus and EPS Surprise Lindsay Corporation Price, Consensus and EPS Surprise

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

Operational Update

Cost of operating revenues surged 45% year on year to $120 million. Gross profit was down 26% to $34 million from the year-earlier quarter. Gross margin came in at 21.8% compared with the year-ago quarter’s 35.3%.

Operating expenses were $24 million during the fiscal fourth quarter compared with the year-ago quarter’s $28 million. Adjusted operating income was $15.4 million, down 11.6% from the prior-year quarter. Adjusted operating margin came in at 10% in the reported quarter, reflecting a contraction of 360 basis points year over year.

Segment Results

The Irrigation segment revenues increased 63% year over year to $125 million in the fiscal fourth quarter. North America irrigation revenues climbed 30% from the year-ago quarter to $54 million, primarily on increased irrigation equipment unit sales volume and higher average selling prices. International irrigation revenues soared 100% year over year to $72 million on higher unit sales volumes, particularly in Brazil and Middle East markets. Higher prices and favorable foreign currency translation drove the upside. The segment’s adjusted operating income improved 161% year on year to $15.6 million as higher irrigation system unit volume helped mitigate the impact of higher raw material and other costs.

The Infrastructure segment revenues declined 45% year over year to $28 million on lower Road Zipper System sales. The segment reported an adjusted operating income of $6.8 million compared with the prior-year quarter’s $19.9 million. This was primarily due to lower revenues and a less favorable margin mix of revenues compared to the prior-year quarter.

Financial Position

Lindsay had cash and cash equivalents of $127 million at the end of the fiscal 2021 compared with $121 million at the end of the prior-fiscal. The company’s long-term debt stood at $115 million at the end of the fiscal year, flat compared with the prior year.

Fiscal 2021 Results

Adjusted earnings per share was $4.13 in fiscal 2021, reflecting an improvement of 16% from $3.56 in fiscal 2020. However, the figure missed the Zacks Consensus Estimate of $4.18. Including one-time items, earnings per share was $3.88 in fiscal 2021 compared with $3.56 in fiscal 2020. Lindsay generated revenues of $567 million, up 20% year over year. The top line surpassed the Zacks Consensus Estimate of $565 million.

Outlook

The company will continue to witness robust demand for irrigation equipment in North America, backed by upbeat agricultural commodity prices and solid farm prospects. Growth in international irrigation will be supported by continued momentum in Brazil and other markets and elevated demand fueled by increased concerns regarding food security. In the infrastructure business, the company anticipates a slower start to fiscal 2022 due to specific project delays. However, the company expects improved sales growth backed by its pipeline of projects.

Price Performance

Zacks Investment ResearchImage Source: Zacks Investment Research

Lindsay’s shares have appreciated 30.4% in the past year, compared with the industry’s rally of 42.1%.

Zacks Rank & Stocks to Consider

Lindsay currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector include Nordson Corporation (NDSN - Free Report) , ScanSource, Inc. (SCSC - Free Report) and DXP Enterprises, Inc. (DXPE - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nordson has an anticipated earnings growth rate of 45.2% for fiscal 2021. The company’s shares have gained around 19% in a year’s time.

ScanSource has an estimated earnings growth rate of 17.9% for the ongoing fiscal year. In a year’s time, the company’s shares have rallied 75%.

DXP Enterprises has a projected earnings growth rate of 77.6% for the current year. The stock has appreciated around 99% in the past year.