Tuesday, Lindsay Corporation (LNN), a provider of irrigation systems and infrastructure products, reported an increase in first quarter earnings, which also topped analysts' estimates, as improved infrastructure and stable irrigation margins nearly offset a 24% decline in revenues.
Net earnings for the quarter increased to $6.7 million from $6.3 million in the corresponding period last year. Earnings per share increased to $0.53 from $0.51 per share in the same period last year and came in above the $0.24 per share projected by eight analysts polled by Thomson Reuters. Analysts' estimates typically exclude special items.
Total revenues slid 24% to $86.0 million from $113.1 million in the corresponding period last year, but came in above the $77.38 million projected by six Street analysts.
Irrigation equipment revenues declined to $53.3 million from $85.9 million in the year-ago quarter. Domestic irrigation revenues plunged 39% from the prior year's first quarter while international irrigation revenues slid 37% over the same period.
Infrastructure revenues were $32.7 million, up 20% from $27.2 million in the same period last year. The company attributed the increase to robust performance on the Mexico City project by the company's Barrier Systems team in the infrastructure segment.
Gross margin rose to 30% from 25.3% a year ago on improved infrastructure margins from higher revenues of quick moveable barrier product and stable irrigation margins. Operating expenses were $14.6 million, decreasing $2.2 million from the prior year period largely due to lower personnel related costs.
Operating income declined 5% to $11.2 million from $11.8 million in the prior year period. Other income increased $1.8 million primarily due to the prior year's first quarter including foreign currency transaction losses from unfavorable movements in exchange rates.
Backlog at November 30, 2009 was $36.1 million compared with $40.1 million at November 30, 2008.
Rick Parod, president and chief executive officer, said, "Going forward, infrastructure spending continues to be uncertain due to delays in Congressional passage of a new federal highway bill. In the agricultural sector, farmer sentiment remains cautious toward capital equipment purchases. As a result, demand for the upcoming irrigation season remains unclear at this time."
LNN closed Monday's regular trading at $37.91.
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