(May 17: Fast Rising Steel Prices Set Back Big Projects) I still think at some point this happens, but it appears that for now farmers (at least in North America) are continuing to absorb the higher priced product without pushing back...(May 14: Deere Earnings - Why I'm Avoiding Equipment Stocks) Again, I must ask when company after company is citing cost inflation in their inputs, and some have been passing them along to the end customers - how can there not be more inflation in the government reports? Ah, I know the answer to that; I am simply asking a rhetorical question.

Back to Titan Machinery (TITN) - not to be mixed up with Titan International (TWI) (another stock we like, which also was up strongly yesterday - I am sure some people bought the wrong stock), a quick review of earnings/guidance. Despite relatively low gross margins of 16%ish (they are a retailer after all) they key is, analysts missed the boat - and when that happens, your stock goes up.

• Titan Machinery Inc (TITN), posted quarterly results that topped Wall Street's targets, boosted by higher sales of farm equipment, and it raised its full-year outlook, sending its shares to a lifetime high.
• The company, which owns and operates agricultural and construction equipment stores, reported a four-fold rise in first-quarter profit to $3.4 million, or 24 cents a share, from $800,000, or 12 cents a share, a year earlier.
• Revenue nearly doubled to $152.6 million. (keep in mind they are rolling up mom and pop shops so this figure is a bit deceiving - its not 100% organic growth by any means)
  
• Analysts were expecting earnings of 13 cents a share, before special items, on revenue of $119.5 million, according to Reuters estimates.
• Equipment sales, which chip in about 80 percent of the company's total revenue, also rose two-fold to $120.9 million.
• "A delayed planting season due to rain may have allowed customers to increase their equipment, parts and services purchases as opposed to a more normal quarter," Chief Financial Officer Peter Christianson said in a conference call.
• "Weather helped benefit this quarter, which probably means that there is less of a benefit from equipment sales in the future quarters," analyst Robert Evans from Craig Hallum Capital said by phone.
• Titan expects full-year earnings of 86 cents to 91 cents a share, compared with its prior view of 77 cents to 82 cents a share.
• The company, which went public in December last year, now sees revenue of $575 million to $625 million for the year. It had previously forecast revenue of $550 million to $600 million.
• Even with the general economy facing a slowdown, farmers are able to spend more on agricultural equipment to get the highest yield, Evans added.

And to make this post a full circle, as our national TV pundit says - there is always a bull market somewhere. But all these price increases have to be eaten by someone... and it is inflationary.

No positions other than enjoying the general agriculture halo