Lindsay (LNN) Q3 Earnings & Revenues Miss Estimates, Down Y/Y

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

Operational Update

Cost of operating revenues was down 22.8% year over year to $91 million. Gross profit plunged 41.7% to $30 million from the $51.5 million witnessed in the year-earlier quarter. Gross margin came in at 24.7% compared to the 30.4% recorded in the year-ago quarter.

Operating expenses declined 21.7% year over year to $25.5 million in the fiscal third quarter. The company reported an operating income of $4.5 million compared to the $18.8 million recorded in the prior-year quarter.

Segment Results

Irrigation segment revenues declined 23% year over year to $98.6 million in the fiscal third quarter. North America irrigation revenues increased 5% from the year-ago quarter while International irrigation revenues decreased 13% year over year. The segment’s operating income was down 36% year over year to $11.6 million. Its operating margin was affected by lower equipment sales volumes and replacement parts in North America.

Infrastructure segment revenues plummeted 45% year over year to $22.4 million, owing to year-over-year soft Road Zipper System sales. The segment reported operating income of $3.6 million compared to the operating income of $14.4 million recorded in the prior-year period.

Financial Position

Lindsay had cash and cash equivalents of $110.8 million at the end of the fiscal third quarter compared to the $111.8 million recorded at the end of the year-ago quarter. The company utilized $19.6 million of cash in operating activities in the quarter compared with cash inflow of $8 million in the prior-year quarter. Lindsay had a long-term debt of $116 million at the end of the reported quarter, stable year on year.

Lindsay’s backlog as of May 31, 2019, was $42.5 million compared with $55.8 million as of May 31, 2018. Approximately $12.4 million of the backlog reduction was due to business divestitures.

Growth Initiatives

In 2018, Lindsay introduced a performance improvement initiative — Foundation for Growth — with the objective of simplifying its business. One of its key financial objectives is to achieve operating margin performance between 11% and 12% in fiscal 2020.

Over the past month, shares of Lindsay have appreciated 13%, outperforming the industry’s growth of 9.1%.

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the Industrial Products sector are Graphic Packaging Holding Company (NYSE:GPK) , Roper Technologies, Inc. (NYSE:ROP) and Valmont Industries, Inc. (NYSE:VMI) each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Graphic Packaging has an estimated earnings growth rate of 4.9% for the ongoing year. The company’s shares have gained 0.7% over the past month.

Roper Technologies has an expected earnings growth rate of 9.4% for the current year. The stock has appreciated 2.5% in the one month time period.

Valmont Industries has a projected earnings growth rate of 12.6% for 2019. The stock has gained 7% over the past month.

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