(By Balaseshan) Lindsay Corp. (NYSE: LNN), a provider of irrigation systems and infrastructure products, reported an increase in quarterly earnings on higher revenue and margins. Earnings and revenue came in ahead of Street's expectations.
Earnings for the first quarter were $14.7 million or $1.15 per share, up from $2.9 million or $0.23 per share last year.
The latest quarter results included $7.2 million of accrued expenses, or $0.37 per share on an after tax basis, relating to an estimated increase in its liability for environmental remediation at its Lindsay, Nebraska facility.
Revenue increased 24% to $147.4 million.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.75 per share on revenue of $131.98 million for the first quarter.
Total irrigation equipment revenues jumped 33% to $134.2 million. Domestic irrigation revenue climbed 59% to $96.5 million, while international irrigation revenue declined 6% to $37.7 million. Infrastructure revenues fell 29% to $13.2 million.
Gross margin rose to 29.1% from 25.4%. Irrigation gross margins increased by about 4 percentage points due to lower input costs, a strong pricing environment and fixed cost leverage on higher sales.
Infrastructure margins decreased by about 4 percentage points due to sales mix and deleverage of fixed costs from lower sales.
"Irrigation order volumes remained extremely robust throughout the first quarter as drought conditions combined with positive farmer sentiment, farm incomes and commodity prices continued into fiscal 2013. Infrastructure sales were disappointing, although we remain optimistic that we will see improving trends over the course of the year," said Rick Parod, president and chief executive officer.
The company said the long term fundamentals of the business remain very positive, as growth drivers of population growth, expanded food production and efficient and environmentally friendly water use remain imperative.
LNN closed Monday's regular session at $80.02. The stock has been trading between $52.68 and $84.17 for the past 52 weeks.