) is set to report fiscal fourth quarter and fiscal 2013 results
before the opening bell on Oct 10. Lindsay has achieved record
results for the first three quarters of fiscal 2013. Let's see
how things are shaping up prior to the announcement.
Factors to Consider This Quarter
International demand for irrigation systems remains positive.
Demand in Brazil and Middle East particularly remains strong. In
Brazil, demand for irrigation equipment is fueled by a lower
interest rate provided by the government to spur the agriculture
industry. Furthermore, in some international markets, adoption of
center pivot systems remains in nascent stages and the demand for
more efficient water use in agriculture is on the rise. Being one
of the market leaders, Lindsay Corporation is well positioned to
capitalize on the demand.
Construction in the U.S. is stabilizing. The American Institute
of Architects projects a 5% increase in spending in 2013 for
non-residential construction projects and 7.2% for 2014. This
bodes well for Lindsay's infrastructure business going ahead.
Particularly, bid activity for Quickchange Moveable Barrier (QMB)
projects has picked up over the last several months. Management
expects some improvement in QMB revenues in the fourth quarter of
fiscal 2013, and expects some new orders in fiscal 2014. Total
backlog increased a robust 80% year over year to $80 million,
suggesting a solid finish to fiscal 2013.
On the flipside, Lindsay's record results for the first three
quarters of fiscal 2013 were driven by positive farmer sentiment
toward capital investments and concerns over the past and
potential drought conditions. As domestic demand normalizes along
with lower expectations for commodity prices, it will be
difficult for Lindsay to deliver similar year-over-year growth in
the future. Furthermore, lower-margin international irrigation
project backlog ill take a toll on the fourth quarter earnings.
Our proven model does not conclusively show that Lindsay
Corporation is likely to beat earnings this quarter. That is
because a stock needs to have both a positive Earnings ESP and a
Zacks Rank #1, #2 or #3 for this to happen. That is not the case
here as shown below.
Positive Zacks ESP
: The Most Accurate estimate stands at 93 cents while the Zacks
Consensus Estimate is at 91 cents. That is a difference of
Zacks Rank #4 (Sell)
: We caution against stocks with Zacks Rank #4 and #5 (Sell rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
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BABCOCK&WILCOX (BWC): Free Stock Analysis
LINDSAY CORP (LNN): Free Stock Analysis
TEREX CORP (TEX): Free Stock Analysis Report
To read this article on Zacks.com click here.
Other Stocks to Consider
Here are some other companies in the machinery-farm sector that
can be considered, as our model shows they have the right
combination of elements to post an earnings beat this quarter:
), Earnings ESP of +0.78% and a Zacks Rank #2 (Buy)
), Earnings ESP of +1.70% and a Zacks Rank #3 (Hold)
The Babcock & Wilcox Company
), Earnings ESP of +1.72% and a Zacks Rank #2 (Buy).