Why Lindsay Shares Are Sliding Today

Lindsay Corporation LNN reported a third-quarter FY23 operating revenue decline of 23.2% year-over-year to $164.55 million, missing the consensus of $208.40 million.

EPS of $1.53 missed the street view of $2.15 in the quarter under review.

"While agricultural market fundamentals remain positive with U.S. net farm income projected to be above historical levels, general economic uncertainty has negatively impacted farmer sentiment, tempering order activity and driving some customers to delay capital investment decisions," said Randy Wood, President, and Chief Executive Officer. 

Operating income for the quarter was $27 million, a decrease of 23% compared to the prior year's third quarter. The operating margin was 16.4% of sales, consistent with the prior-year quarter. 

"A projected year-over-year decline in U.S. net farm income, combined with high input costs and increasing interest rates, negatively impacted unit sales volume in our irrigation business," Wood added. 

The company exited the quarter with $144.4 million in cash and equivalents. Long-term debt as of quarter end totaled $115.21 million.

As of May 31, 2023, the backlog of unfilled orders was $94.5 million compared with $98.3 million a year ago.

Outlook: The company expects sales volume in Brazil to increase in the fourth quarter, supported by the new government financing program that was recently announced. 

Demand across other international markets continues to be supported by positive agricultural market fundamentals and continuing global concerns over food security and global grain supplies.

Price Action: LNN shares are trading lower by 6.54% at $116.56 on the last check Thursday.