Shares in Titan Machinery slumped by 11% after the farm equipment retailer owned up to "lower than expected" profits, thanks to a soft performance by its parts and servicing business.

The US-based dealer for the Case and New Holland brands reported a jump of one third to $252.3m in revenues for the November-to-January period, reflecting improvement in both its construction and core agriculture divisions.

However, earnings growth was limited to 6.1%, taking them to $3.36m, a figure below company and Wall Street expectations.

The shortfall reflected disappointing margins in equipment sales, and a "lower than anticipated" revenue increase in the parts and services division, which runs at the highest margins, said David Meyer, the Titan chairman and chief executive, and the biggest shareholder in the group.

Strong farm finances 

The data took the shine off a forecast of a jump of at least 10% in revenues for Titan's current fiscal year, boosted by firm farm finances.

"Farmers in the upper Midwest continue to have strong balance sheets and ample access to credit," Mr Meyer said.

"Industry data suggests that the operating environment for farmers will be favourable in the coming year."

Titan was "confident" in achieving profits growth for it 2011 financial year, which ends in January, forecasting earnings of $17.2m-19.0m, implying a rise of up to 21%.

Titan shares stood 11.3% lower at $13.33 in midday trade in New York, wiping $5m from the value of Mr Meyer's holding.