Agricultural Machinery Stocks Q2 Earnings: Lindsay (NYSE:LNN) Best of the Bunch

Oct 20, 2024

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Lindsay (NYSE:LNN) and the best and worst performers in the agricultural machinery industry.

Agricultural machinery companies are investing to develop and produce more precise machinery, automated systems, and connected equipment that collects analyzable data to help farmers and other customers improve yields and increase efficiency. On the other hand, agriculture is seasonal and natural disasters or bad weather can impact the entire industry. Additionally, macroeconomic factors such as commodity prices or changes in interest rates–which dictate the willingness of these companies or their customers to invest–can impact demand for agricultural machinery.

The 5 agricultural machinery stocks we track reported a softer Q2. As a group, revenues missed analysts’ consensus estimates by 4.8% while next quarter’s revenue guidance was 2% below.

Big picture, the Federal Reserve has a dual mandate of inflation and employment. The former had been running hot throughout 2021 and 2022 but cooled towards the central bank's 2% target as of late. This prompted the Fed to cut its policy rate by 50bps (half a percent) in September 2024. Given recent employment data that suggests the US economy could be wobbling, the markets will be assessing whether this rate and future cuts (the Fed signaled more to come in 2024 and 2025) are the right moves at the right time or whether they're too little, too late for a macro that has already cooled.

Amidst this news, agricultural machinery stocks have had a rough stretch. On average, share prices are down 6.1% since the latest earnings results.

A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE:LNN) provides a variety of proprietary water management and road infrastructure products and services.

Lindsay reported revenues of $139.2 million, down 15.4% year on year. This print fell short of analysts’ expectations by 3.6%. Overall, it was a strong quarter for the company: Lindsay blew past analysts' EPS expectations, driven by operating margin outperformance versus Wall Street's estimates. Additionally, the company announced a significant customer win (the largest contract signed in history, in fact).

“Market conditions in our irrigation segment continue to weigh on farmer sentiment, resulting in demand softness. In North America, high precipitation levels and wet field conditions across the Midwest contributed to lower sales of irrigation equipment and replacement parts during our third quarter," said Randy Wood, President and Chief Executive Officer.

The stock is up 6.4% since reporting and currently trades at $120.40.

Read our full report on Lindsay here, it’s free.

With a history that features both organic growth and acquisitions, AGCO (NYSE:AGCO) designs, manufactures, and sells agricultural machinery and related technology.

AGCO Corporation reported revenues of $3.25 billion, down 15.1% year on year, falling short of analysts’ expectations by 6.8%. The business performed better than its peers, but it was unfortunately a softer quarter with underwhelming earnings guidance for the full year and a miss of analysts’ operating margin estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 3.3% since reporting. It currently trades at $98.75.

Is now the time to buy AGCO Corporation? Access our full analysis of the earnings results here, it’s free.

Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.

Alamo reported revenues of $416.3 million, down 5.5% year on year, falling short of analysts’ expectations by 2.9%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

As expected, the stock is down 6.1% since the results and currently trades at $181.50.

Read our full analysis of Alamo’s results here.

Ceasing all production to support the war effort during World War II, Toro (NYSE:TTC) offers outdoor equipment for residential, commercial, and agricultural use.

The Toro Company reported revenues of $1.16 billion, up 6.9% year on year. This result came in 8.1% below analysts' expectations. It was a softer quarter as it also produced a miss of analysts’ earnings estimates.

The Toro Company had the weakest performance against analyst estimates among its peers. The stock is down 7.8% since reporting and currently trades at $83.86.

Read our full, actionable report on The Toro Company here, it’s free.

Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.

Titan International reported revenues of $532.2 million, up 10.6% year on year. This result missed analysts’ expectations by 2.8%. It was a softer quarter as it also logged a miss of analysts’ earnings estimates and revenue guidance for next quarter missing analysts’ expectations.

Titan International pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 19.8% since reporting and currently trades at $6.83.

Read our full, actionable report on Titan International here, it’s free.

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