Titan Machinery Inc. ( TITN Quick Quote TITN - Free Report) reported first-quarter fiscal 2023 (ended Apr 30, 2022) adjusted earnings per share (EPS) of 79 cents, beating the Zacks Consensus Estimate of 51 cents by a margin of 55%. The bottom line improved 72% from earnings per share of 46 cents reported in the last fiscal year’s comparable quarter. The upside can be attributed to solid performances across all three segments, namely Agricultural, Construction and International. On a reported basis, TITN delivered an EPS of 78 cents in the quarter compared with 47 cents in the prior fiscal year’s corresponding quarter. Total revenues in the reported quarter were $461 million, up 24% from the levels reported in the previous fiscal year’s comparable quarter. The top line surpassed the consensus mark of $406 million. Equipment revenues rose 29% year over year to $356 million, while parts revenues were up 9% to $69 million. Revenues generated from service were $30 million in the reported quarter, up 7% from the year-ago quarter’s levels. Meanwhile, rental revenues were up 2.5% year over year to $6.6 million. Costs and Margins
Cost of sales was up 23% to $372 million from the prior fiscal year’s quarterly reading. Gross profit increased 25% year over year to $89 million. Gross margin was 19.2%, up from 19% in the last fiscal year’s quarter, driven by robust equipment margins, partially offset by revenue mix.
Operating expenses increased 14% from the earlier fiscal year’s tally to $64 million. Adjusted EBITDA surged 52% year over year to $30 million. Adjusted EBITDA margin in the fiscal fourth quarter was 6.5% compared with 5.3% in the prior fiscal year’s relevant quarter. Segmental Performance
Agriculture revenues rose 39% to $318 million from the last fiscal year’s comparable quarter on strong demand. The segment’s income before taxes improved 47% year over year to $16.4 million.
Construction revenues were $67 million in the fiscal first quarter, down 2.4% from the comparable quarter in the prior fiscal year. Same-store sales increased 24% on strong equipment demand, offset by the lost contributions from the divestiture of construction stores in Montana and Wyoming and consumer products store in North Dakota. The segment reported an adjusted income before taxes of $3.2 million, a substantial improvement from the prior-year quarter’s $0.1 million, reflecting the operating improvements across the company’s optimized footprint. International revenues were $75 million, reflecting year-on-year growth of 1%. Growth was impacted by the conflict in Ukraine. The segment reported income before taxes of $4.3 million, which was higher than $2.8 million reported in the previous fiscal year’s quarter. Financial Position
Cash generated by operating activities was $5.3 million in the first quarter of fiscal 2023 compared with the prior fiscal year quarter’s $27 million. Titan Machinery ended the reported quarter with a cash balance of around $147 million. Long-term debt as of Apr 30, 2022, was around $82 million compared with $75 million as of Jan 31, 2022.
Guidance for Fiscal 2023
Titan Machinery expects Agriculture revenues to increase 27-32% from the last full-fiscal level, higher than the 22-27% range expected earlier. The Construction segment’s revenue growth is projected to be down 10-15% from the last fiscal year’s actuals. It suggests an improvement from the 12-17% decline expected earlier. The International segment’s revenues are expected to decrease 0-5% compared to the decline of 8-13% expected previously. TITN expects EPS for fiscal 2023 between $2.85 and $3.15, up from the previous guidance of $2.55-$2.85.
Share Price Performance Image Source: Zacks Investment Research
In the past year, shares of Titan Machinery have fallen 5.3% compared with the
industry’s decline of 3.3%. Zacks Rank & Other Stocks to Consider
Titan Machinery currently carries a Zacks Rank #2 (Buy). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Some other top-ranked stocks in the Retail - Wholesale sector are Designer Brands ( DBI Quick Quote DBI - Free Report) , Kroger ( KR Quick Quote KR - Free Report) and Penske Automotive Group ( PAG Quick Quote PAG - Free Report) . All of these stocks sport a Zacks Rank #2. Designer Brands has a projected earnings growth rate of 8.8% for the current fiscal. The Zacks Consensus Estimate for DB’s current-year earnings has been revised 9% upward in the past 90 days.
DBI has a trailing four-quarter earnings surprise of 112.8%, on average. The stock has rallied 20% in the past three months.
Kroger has a projected earnings growth rate of 4% for the current year. The Zacks Consensus Estimate for NTR’s current-year earnings has been revised 12% upward in the past 90 days.
Kroger has a trailing four-quarter earnings surprise of 112.8%, on average. KR has gained 11.4% in the past three months.
The Zacks Consensus Estimate for Penske Automotive’s current financial-year earnings per share suggests growth of 10% from the year-ago reported numbers. The estimate has moved up 19% over the past 90 days.
PAG has a trailing four-quarter earnings surprise of 17.7%, on average. Its shares have appreciated 17% over the past three months.