Titan Machinery Inc. (TITN), a network of agricultural and construction equipment stores, Thursday said it expects a loss for the first quarter, as revenues came in less than expected amid late spring weather and challenging conditions in the construction industry. The firm cut its profit forecast for the year. The stock fell 12 percent in the extended trade.
For the first quarter of fiscal 2014, preliminary loss per share is expected to be in the range of $0.01 to $0.03, compared to net income per share of $0.36 last year.
On average, 9 analysts polled by Thomson Reuters expect earnings of $0.19 per share for the quarter. Analysts' estimates typically exclude special items.
Preliminary pre-tax loss for the quarter is expected to be in the range of $0.7 million to $1.2 million compared to $12.4 million pre-tax income in the same period last year. This is expected to be $7.0 million less than the company expected, as a result of $3.5 million less from the Agriculture segment and $3.5 million less from the Construction segment.
The year-over-year decline in company pre-tax margin was primarily due to lower-than-expected revenue in the first quarter.
Preliminary revenue is expected to be approximately $440 million compared to revenue of $421.7 million in the prior-year period. This is around $50 million less than the company previously anticipated, reflecting $35 million less from Agriculture segment and $15 million less from Construction segment. Analysts expect revenues of $479.98 million.
The company attributed the lower-than-expected revenue to abnormally delayed spring weather combined with cautionary agriculture customer sentiment and the continued challenging industry conditions in the Construction segment.
David Meyer, Titan Machinery's CEO, said, "Both segments of our business were impacted by the abnormally late spring weather which extended through the end of our first quarter...In addition to the late spring weather, our Construction segment was also affected by the challenging conditions in this industry and the cost of expanding our network. ''
However, Meyer expects the agriculture segment revenue that was delayed in the first quarter to be realized in the coming quarters as the revenue impact in the first quarter was primarily a timing issue.
The company expects to see improvements in the construction segment in the second quarter and throughout the remainder of fiscal 2014.
Based on the preliminary first-quarter results and increased visibility of market conditions, the company now sees annual earnings per share in the range of $1.70 to $2.00, lower than the previous range of $2.00 to $2.30, primarily reflecting the lower operating margins in the construction segment. The company backed its previous revenue range of $2.35 billion to $2.55 billion.
TITN closed down 0.6 percent on Thursday at $22.50 and dropped 12 percent in the extended trade.
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