Lindsay Corporation (NYSE: LNN) reported a 72% dip in earnings for the third quarter of fiscal 2019 due to lower revenues, lower commodity prices, and uncertainty regarding the outcome of trade negotiations. The results missed analysts’ expectations.
Net income plunged by 72% to $2.9 million or $0.27 per share. Adjusted earnings tumbled by 70% to $0.50 per share. Operating revenues dropped by 29% to $121.05 million, due to the business divestitures in the irrigation segment as part of its foundation for growth initiative.
The company said low commodity prices and uncertainty regarding the outcome of trade negotiations continued to weigh on farmer sentiment and demand for irrigation equipment during the quarter. Along with that, strong Road Zipper System sales in the prior-year quarter resulted in a challenging year-over-year comparison.
Irrigation segment revenues dropped by 23% due to lower irrigation equipment unit volume and lower sales of replacement parts. Infrastructure segment revenues decreased by 45% due entirely from lower Road Zipper System sales compared to the prior-year period.
The backlog of unshipped orders at May 31, 2019, was $42.5 million compared with $55.8 million at May 31, 2018. Excluding the impact of the divestitures, irrigation segment backlogs were higher and infrastructure backlogs were lower compared to the prior year. Subsequent to the end of the quarter, a $15.0 million Road Zipper System order was received from a customer in Japan, with delivery expected to begin in the fourth quarter of fiscal 2019.
The company said corn plantings have been delayed by severe wet weather and widespread flooding in the US. This has led to curtailing of planted acreage, supply estimates lowering and driving a recent increase in corn prices. Any further reduction in supply and an increase in corn prices support an improved outlook for irrigation equipment demand.
Shares of Lindsay ended Monday’s regular session down 4.23% at $79.55 on the NYSE. The stock has fallen over 20% in the past year and over 15% in the past three months.