Categories Earnings, Other Industries

Earnings preview: Trade concerns to hurt Lindsay Q3 2019 results

Lindsay Corporation (NYSE: LNN) continued to face the wrath of the trade concerns, which weigh on farmer sentiment and impacting the North America irrigation market conditions. The wrath is likely to be seen in the water management and road infrastructure products provider’s earnings results for the third quarter of 2019, which is set for release on Tuesday before the market opens.

The results will be hurt by the business divestitures in the irrigation segment. This was due to the challenging agricultural market conditions given the continued lower commodity prices and decreased farmer sentiment. While the current market conditions have been negatively impacted by tariffs and unresolved trade conflicts, the company does not believe this is a sustained market environment.

A farmer confidence chart showed a sudden and dramatic downturn in farmer sentiment post-harvest. This worsening market environment meant a reduction in the company’s irrigation sales. The company’s 2020 objective of 11% to 12% operating margin was based on Lindsay’s view that the fiscal year 2017 represented the trough of the market. Lindsay remained committed to its goal of improving operating margin performance by 300 to 400 basis points.

Trade concerns to hurt Lindsay Q3 2019 results
Photo Courtesy: Lindsay / Facebook post

Analysts expect the company’s earnings to plunge by 54.20% to $0.76 per share and revenue will dip by 23.60% to $129.51 million for the third quarter. In comparison, during the previous year quarter, Lindsay posted a profit of $1.66 per share on revenue of $169.57 million. The company has missed analysts’ expectations thrice in the past four quarters.

For the second quarter, the company slipped to a loss from a profit last year, due to the business divestitures in the irrigation segment as part of its foundation for growth initiative. Revenue dropped by 16% year-over-year.

North America irrigation sales volumes were significantly lower than anticipated as the unresolved US-China trade dispute contributed to a further decline in farmer sentiment. Along with this, lower Road Zipper System sales contributed to a disappointing fourth-quarter.

Shares of Lindsay opened higher on Friday and is trading in the green territory on the NYSE. The stock has fallen over 16% in the past year and over 13% in the past three months.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.

Most Popular

What to look for when CVS Health (CVS) reports Q3 earnings

Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain

eBay (EBAY): A few factors that helped drive growth in Q3 2024

Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,

CVX Earnings: Chevron reports lower revenue and profit for Q3 2024

Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top