Shares in Lindsay Corporation echoed those in agribusiness
peer Monsanto by hitting a four-year high after the irrigator maker unveiled a
rush in sales to US farmers concerned over further drought.
The Nebraska-based company revealed a five-fold jump to
$14.7m in earnings in the September-to-November quarter, equivalent to $1.15 a
The result was well ahead of the $0.75-a-share result that
Wall Street had expected.
And while Lindsay chief executive Rick Parod remained cautious
on the company's outlook - saying that the result "represents pulling forward
in order volume, at least in part, from the second half" of the group's financial
year – the results were well received by investors.
Lindsay shares hit $88.54 at one point, the highest since
September 2008, before closing at $86.03 in New York, a gain of 7.5% on the
'Very concerned about
The earnings rise reflected a jump of 59% to $96.5m in sales
of irrigator to US growers, whose crop yields were dented by the worst drought
"At drought conditions across the US pushed commodity prices
higher through the summer and fall months, the realisation of the importance of
efficient mechanical irrigation rose creating robust market conditions," Mr
The largest sales increases came "in the drought-impacted Corn
"What we're seeing is farmers are very concerned about the
drought and the potential future impact of more drought or dry weather."
However, growers were "obviously pulling forward, to some
degree, some of those applications that we think eventually would take place
any way, whether it was later this year or next year or the year after", he
Middle East slowdown
The surge in domestic irrigator sales outpaced a 6% increase
to $37.7m in sales of irrigation abroad, "due to lower project revenues in the
Middle East", where the group booked takings from a large project a year ago.
"Excluding the Middle East market, the international
irrigation revenues showed a high single-digit increase over the previous
year's quarter," Mr Parod said.
Sales in Lindsay's infrastructure business, which makes road
barriers, sales tumbled 29% to $13.2m.
Group revenues nonetheless rose 24% to $147.4m, thanks to
the strong domestic irrigator market.