) reported earnings of $1.47 per share for the fiscal third quarter
2012; surpassing the Zacks Consensus Estimate of $1.36 and a year
ago quarter's earnings of $1.20 per share.
Total revenue in the quarter increased 12% year over year to $172.1
million, beating the Zacks Consensus Estimate of $166 million. The
improvement was driven by an 18% increase in total irrigation
equipment revenues that largely stemmed from a 38% rise in domestic
irrigation revenues. On the other hand, international irrigation
revenues decreased 12% and infrastructure revenues fell 15% during
Cost of goods sold increased 10% to $123.1 million. Gross profit
rose 18% to $49.0 million; consequently gross margin increased 150
basis points year over year to 28.5%. Irrigation margins improved
due to favorable sales mix and infrastructure margins were
benefited by higher product pricing in road safety and diversified
products coupled with lower manufacturing costs.
Operating expenses increased 10.3% to $20.2 million in the
quarter. Operating income in the quarter amounted to $28.8
million, up 24.4% year over year. Operating margin was 16.7%, up
160 basis points year over year.
Lindsay's backlog at the end of third-quarter 2012 was $44.5
million compared with $43.3 million at the end of third-quarter
2011 and $87.3 million at the end of second-quarter 2012.
Lindsay ended the third quarter of fiscal 2012 with cash and cash
equivalents of $119.8 million from $100.6 million at the end of
third-quarter 2011. Long-term debt declined to $1.1 million from
$5.4 million as of May 31, 2011. The company generated $25.9
million of net cash from operating activity in the quarter compared
with $28.3 million in the year-ago quarter.
Lindsay expects global irrigation equipment demand to remain high,
driven by increased food production and efficient water use.
However, the company is skeptic about infrastructure demand due to
tight government spending on infrastructure and roads.
Increased food production coupled with efficient water use has been
driving Lindsay's irrigation equipment demand. We expect food
production to increase further, driven by the spurt in worldwide
population and growth and efficient water use.
However, the infrastructure segment remains a concern due to
uncertainty regarding the new highway bill. Tight credit conditions
make the situation worse as customers find it difficult to obtain
LINDSAY CORP (LNN): Free Stock Analysis Report
VALMONT INDS (VMI): Free Stock Analysis Report
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Lindsay faces competition from companies like
Valmont Industries Inc.
). The share retains a short-term Zacks #3 Rank (Hold). We have a
long-term Neutral recommendation on Lindsay.