U.S.-China Trade Uncertainty Hurts Lindsay Quarterly Earnings


Lindsay Corp.  reported downbeat second quarter earnings on Tuesday, with sales in its irrigation and infrastructure division also missing Wall Street expectations. Shares of the Omaha, Nebraska-based manufacturer lost more than $12, or 12% to $81.98 in pre-market trade.

Profit and sales of company the fell sharply during the quarter as farmer sentiment was weakened by uncertainty created by the prolonged US-China trade war. The company makes irrigation equipment used in the agriculture industry as well as infrastructure products for use in transportation.

Lindsay Chief Executive Tim Hassinger warned the company does not expect to see significant upturn in farmer sentiment if the Sino-US trade uncertainty continues. The CEO also said that impacts of the recent flooding in the Midwest remains unknown at the moment. Nonetheless, the company expects international project markets will remain active and market conditions in Brazil will continue showing improvements.

Lindsay stock was down $$8.36, or 8.89% to 85.73 apiece as of 10:20 a.m. ET. The stock has rallied nearly 9% on a year-over-year basis, but has lost 2.2% since the beginning of the year through Monday’s close.

LNN Earnings & Outlook

Lindsay posted a net loss of $3.4 million, or $0.32 per share, compared with a profit of $1.7 million, or $0.16 per share, in the same period last year. Earnings, adjusted for one-time costs and gains, came to $0.02 per share. On average, analysts surveyed by FactSet were expecting the company to report adjusted earnings of $0.38 per share.

Net sales for the three months ended February 28, 2019 were pegged at $109.2 million, a decline of 16% on year-over-year basis. Analysts polled by FactSet had called for net sales of $115.4 million.

Sales in the Lindsay’s irrigation and infrastructure division also failed to beat the expectations of Wall Street analysts.

Lindsay CEO Comments

“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 that, lower Road Zipper System sales contributed to a disappointing quarter. We were however pleased to see an increase in our international irrigation sales compared to the prior year,” said Tim Hassinger.

Lindsay Corp. Profile

Lindsay Corp. provides a variety of proprietary water management and road infrastructure products and services. The company has been involved in the manufacture and distribution of agricultural irrigation equipment and international water efficiency solutions and highway infrastructure firm with sales and distribution.

It has operations which are categorized into two major reporting segments, Irrigation, and Infrastructure. The company generates maximum revenue from Irrigation segment and geographically from the United States.