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Titan Machinery (TITN) Q4 Earnings & Revenues Top, Up Y/Y
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Titan Machinery Inc. (TITN - Free Report) reported earnings per share (EPS) of $1.05 in fourth-quarter fiscal 2024 (ended Jan 31, 2024), surpassing the Zacks Consensus Estimate of 99 cents. The bottom line marked a 31% improvement from the EPS of 81 cents reported in the year-ago quarter. Contribution from the recent acquisitions and higher revenues across all segments drove the improved results in the quarter.
Total revenues in the reported quarter were $852 million, up 46% from the year-ago quarter. The top line beat the consensus mark of $740 million.
Equipment revenues surged 52% year over year to $714 million and parts revenues were up 26% to $91 million. Revenues generated from service were $35 million in the reported quarter, up 26% from the year-ago quarter. Meanwhile, rental revenues were up 3% year over year to $12 million.
Titan Machinery Inc. Price, Consensus and EPS Surprise
Cost of sales was up 50% year over year to $711 million in the quarter under review. Gross profit increased 30% year over year to $141 million. The gross margin was 16.6% compared with 18.7% in the year-ago fiscal quarter. Margins were down due to lower equipment margins. The company has been experiencing some normalization of equipment gross margin across each of its segments.
Operating expenses increased 20% from the year-ago quarter to $100 million due to acquisitions and an increase in variable expenses. Adjusted EBITDA increased 42% year over year to $45 million. The adjusted EBITDA margin in the fiscal fourth quarter was 5.3% compared with 5.5% in the year-ago quarter.
Segment Performance
Agriculture revenues rose 41% from the last fiscal year’s comparable quarter to $620.6 million. The upside was driven by benefits from the acquisitions of Pioneer Farm Equipment and Scott Supply and same-store growth of 35.5%. The segment’s income before taxes surged 49% year over year to $28.8 million.
Construction revenues were $100 million in the fiscal fourth quarter, up 18% from the comparable quarter in the prior fiscal year. The increase in revenues was driven by a same-store sales increase of 17.7%, which resulted from the timing of equipment deliveries, which shifted some revenues into the fourth quarter of this year as compared with the timing of deliveries to customers in the second half of last year. The segment reported income before taxes of $4.6 million, down 14% from the year-ago quarter’s $5.4 million.
Europe revenues were $61.6 million, up 8% from the year-ago quarter’s $57 million. The segment reported a loss before taxes of $0.6 million against a profit of $1.5 million in the fourth quarter of fiscal 2023. Normalization of equipment margins and higher operating expenses resulted in the loss for the quarter. TITN began reporting its Australia segment in the fourth quarter. The segment reported revenues of $69.8 million and income before taxes of $4.1 million for the quarter.
Cash Flow & Balance Sheet
Cash used for operating activities was $32 million in fiscal 2024 against an inflow of $10.8 million in fiscal 2023. The decline in operating cash flow was driven by an increase in inventories, and timing and collections of accounts receivable, which was partially offset by an increase in floorplan lines of credit from manufacturers and higher net income for the fiscal year 2024.
Titan Machinery ended fiscal 2024 with a cash balance of around $38 million compared with a cash balance of $44 million at the end of fiscal 2023. The company’s long-term debt rose to $106 million as of the end of fiscal 2024 compared with $90 million as of fiscal 2023 end.
Fiscal 2024 Results
Titan Machinery reported a record EPS of $4.93 in fiscal 2024 compared with $4.49 in fiscal 2023. The bottom line beat the Zacks Consensus Estimate of $4.91.
Total revenues improved 25% year over year to a record $2.1 billion but fell short of the consensus estimate of $2.6 billion.
FY25 Guidance
Titan Machinery anticipates revenue growth in fiscal 2025 primarily due to the full integration of the O'Connors acquisition into operations, alongside steady expansion in the parts and service business.
Growth in the Agriculture segment's revenues is projected to be between 0% and 5%. The Construction segment is expected to see a revenue increase of 3% to 8% for fiscal 2025. Revenues in Europe are anticipated to remain flat or rise by up to 5% compared with fiscal 2024. The Australia segment's revenues are estimated to range from $250 million to $270 million in fiscal 2025.
The company foresees EPS falling within the $3.00 to $3.50 range for fiscal 2025.
Share Price Performance
In the past year, shares of Titan Machinery have fallen 11.8% against the industry’s 25.6% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Titan Machinery currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for AEO’s fiscal 2025 sales and earnings indicates year-over-year growth of 3.3% and 12.5%, respectively. The EPS estimates for fiscal 2025 have moved up 12% in the past 60 days.
The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and earnings implies growth of 4.9% and 30.7%, respectively, year over year. The EPS estimate for 2024 has moved 4% north in the past 60 days.
The Zacks Consensus Estimate for BURL’s fiscal 2024 sales and earnings suggests year-over-year growth of 10% and 22%, respectively. The EPS estimate for fiscal 2024 and 2025 has gone up 5% in the past 60 days.
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Titan Machinery (TITN) Q4 Earnings & Revenues Top, Up Y/Y
Titan Machinery Inc. (TITN - Free Report) reported earnings per share (EPS) of $1.05 in fourth-quarter fiscal 2024 (ended Jan 31, 2024), surpassing the Zacks Consensus Estimate of 99 cents. The bottom line marked a 31% improvement from the EPS of 81 cents reported in the year-ago quarter. Contribution from the recent acquisitions and higher revenues across all segments drove the improved results in the quarter.
Total revenues in the reported quarter were $852 million, up 46% from the year-ago quarter. The top line beat the consensus mark of $740 million.
Equipment revenues surged 52% year over year to $714 million and parts revenues were up 26% to $91 million. Revenues generated from service were $35 million in the reported quarter, up 26% from the year-ago quarter. Meanwhile, rental revenues were up 3% year over year to $12 million.
Titan Machinery Inc. Price, Consensus and EPS Surprise
Titan Machinery Inc. price-consensus-eps-surprise-chart | Titan Machinery Inc. Quote
Costs and Margins
Cost of sales was up 50% year over year to $711 million in the quarter under review. Gross profit increased 30% year over year to $141 million. The gross margin was 16.6% compared with 18.7% in the year-ago fiscal quarter. Margins were down due to lower equipment margins. The company has been experiencing some normalization of equipment gross margin across each of its segments.
Operating expenses increased 20% from the year-ago quarter to $100 million due to acquisitions and an increase in variable expenses. Adjusted EBITDA increased 42% year over year to $45 million. The adjusted EBITDA margin in the fiscal fourth quarter was 5.3% compared with 5.5% in the year-ago quarter.
Segment Performance
Agriculture revenues rose 41% from the last fiscal year’s comparable quarter to $620.6 million. The upside was driven by benefits from the acquisitions of Pioneer Farm Equipment and Scott Supply and same-store growth of 35.5%. The segment’s income before taxes surged 49% year over year to $28.8 million.
Construction revenues were $100 million in the fiscal fourth quarter, up 18% from the comparable quarter in the prior fiscal year. The increase in revenues was driven by a same-store sales increase of 17.7%, which resulted from the timing of equipment deliveries, which shifted some revenues into the fourth quarter of this year as compared with the timing of deliveries to customers in the second half of last year. The segment reported income before taxes of $4.6 million, down 14% from the year-ago quarter’s $5.4 million.
Europe revenues were $61.6 million, up 8% from the year-ago quarter’s $57 million. The segment reported a loss before taxes of $0.6 million against a profit of $1.5 million in the fourth quarter of fiscal 2023. Normalization of equipment margins and higher operating expenses resulted in the loss for the quarter.
TITN began reporting its Australia segment in the fourth quarter. The segment reported revenues of $69.8 million and income before taxes of $4.1 million for the quarter.
Cash Flow & Balance Sheet
Cash used for operating activities was $32 million in fiscal 2024 against an inflow of $10.8 million in fiscal 2023. The decline in operating cash flow was driven by an increase in inventories, and timing and collections of accounts receivable, which was partially offset by an increase in floorplan lines of credit from manufacturers and higher net income for the fiscal year 2024.
Titan Machinery ended fiscal 2024 with a cash balance of around $38 million compared with a cash balance of $44 million at the end of fiscal 2023. The company’s long-term debt rose to $106 million as of the end of fiscal 2024 compared with $90 million as of fiscal 2023 end.
Fiscal 2024 Results
Titan Machinery reported a record EPS of $4.93 in fiscal 2024 compared with $4.49 in fiscal 2023. The bottom line beat the Zacks Consensus Estimate of $4.91.
Total revenues improved 25% year over year to a record $2.1 billion but fell short of the consensus estimate of $2.6 billion.
FY25 Guidance
Titan Machinery anticipates revenue growth in fiscal 2025 primarily due to the full integration of the O'Connors acquisition into operations, alongside steady expansion in the parts and service business.
Growth in the Agriculture segment's revenues is projected to be between 0% and 5%. The Construction segment is expected to see a revenue increase of 3% to 8% for fiscal 2025. Revenues in Europe are anticipated to remain flat or rise by up to 5% compared with fiscal 2024. The Australia segment's revenues are estimated to range from $250 million to $270 million in fiscal 2025.
The company foresees EPS falling within the $3.00 to $3.50 range for fiscal 2025.
Share Price Performance
In the past year, shares of Titan Machinery have fallen 11.8% against the industry’s 25.6% growth.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Titan Machinery currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Retail-Wholesale sector are American Eagle Outfitters (AEO - Free Report) , Brinker International (EAT - Free Report) and Burlington Stores (BURL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for AEO’s fiscal 2025 sales and earnings indicates year-over-year growth of 3.3% and 12.5%, respectively. The EPS estimates for fiscal 2025 have moved up 12% in the past 60 days.
The Zacks Consensus Estimate for EAT’s fiscal 2024 sales and earnings implies growth of 4.9% and 30.7%, respectively, year over year. The EPS estimate for 2024 has moved 4% north in the past 60 days.
The Zacks Consensus Estimate for BURL’s fiscal 2024 sales and earnings suggests year-over-year growth of 10% and 22%, respectively. The EPS estimate for fiscal 2024 and 2025 has gone up 5% in the past 60 days.