Irrigation equipment maker Lindsay Corp. (LNN), Wednesday reported a decline in profit for the first quarter, hurt mainly higher environmental remediation expenses, which offset a double-digit growth in revenues. Following the news, shares of Lindsay fell over six percent on the New York Stock Exchange.
Omaha, Nebraska-based Lindsay's profit for the quarter dropped to $2.9 million or $0.23 per share from $4.3 million or $0.34 per share last year. On average, seven analysts polled by Thomson Reuters estimated earnings of $0.45 per share for the quarter. Analysts' estimates usually exclude special items.
The quarter's results included environmental remediation expense of $7.2 million or $0.37 per share, compared to $0.7 million or $0.04 per share last year.
Lindsay's revenues for the quarter grew 34 percent to $119.2 million from last year, topping analysts' estimate of $101.96 million.
Lindsay operates in two segments - Irrigation and Infrastructure. Total irrigation equipment revenues for the quarter rose 68 percent to $100.8 million, as domestic irrigation revenues increased 66 percent, while international irrigation revenues advanced 71 percent.
Infrastructure revenues decreased 37 percent to $18.4 million due to lower sales and leases of Quickchange Moveable Barrier systems.
Gross margin, the percentage of sales left after deducting production costs, dropped to 25.4 percent from 27.2 percent last year, hurt mainly due to lower revenues of higher-margin Quickchange Moveable Barrier product.
Operating margins for the quarter also declined to 4.3 percent from 7.4 percent last year. Excluding environmental accruals, operating margin was 10.3 percent compared to 8.2 percent last year.
Looking forward, Chief Executive Rick Parod said, "Over the course of fiscal 2012, our business will remain subject to the volatility we have seen in agriculture commodity prices recently, and government spending decisions in infrastructure."
LNN is currently trading at $50.13, down $3.47 or 6.47%, on a volume 0.1 million shares.
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