Here’s Why Lindsay Corporation Hit A New 52-Week High On Thursday


Published: 14/10/2016 – – Follow us on Twitter: @SMDailyco

Here’s Why Lindsay Corporation Hit A New 52-Week High On Thursday

Shares of Lindsay (NYSE: LNN), a provider of water management and road infrastructure products and services, gained more than 10 percent on Thursday and hit a new 52-week high of $80.28 on Thursday.

The company reported its fourth quarter results prior to the market open and said that it earned $0.73 per share on revenue of $132.90 million.  Wall Street analysts were expecting the company to earn $0.43 per share on revenue of $113.47 million.

Net earnings for the quarter improved to $7.8 million from a net loss of $3.2 million in the same quarter a year ago.

The company’s irrigation segment saw its revenue increase by three percent year-over-year to $99.9 million, of which $57.3 million was realized in the U.S.  Lindsay cited an increase in irrigation system unit volume and a modest increase in other irrigation component revenues.  The company also highlighted a strong gross margin growth to 30.1 percent from 27.1 percent a year ago due to an increase in higher-margin Road Zipper System sales and an improved overall product mix and volume leverage from road safety product sales.

For the full fiscal year, total revenue fell eight percent to $516.4 million and net earnings fell to $20.3 million from $26.3 million a year ago.

Infrastructure stocks, like Lindsay, have received more than its fair share of attention as of late.  Both Republican Presidential Nominee Donald Trump and his counterpart Hillary Clinton both agree (surprisingly) that the government needs to heavily invest in the infrastructure across the country.

Rick Parod, president and chief executive officer, commented, “We ended our fiscal year with improved fourth quarter performance in both Irrigation and Infrastructure. The irrigation market remains challenging as lower commodity prices and farm income continue to restrain demand for our irrigation products. In spite of these market conditions we have been able to improve gross margin levels and deliver solid operating income for the year. The Infrastructure segment continues to perform well as market activity reflects improving demand.”

Parod continued, “Estimated record production for both corn and soybeans from the fall harvest in the U.S. will continue downward pressure on commodity prices. Accordingly, we are not expecting any meaningful improvement in the overall irrigation market in fiscal 2017 and will continue to manage our cost structure while investing in productivity improvement and selected growth initiatives. The longer term drivers for our markets of population growth, expanded food production and efficient water use, and infrastructure upgrades and expansion support our expectations for growth.”