Lindsay Corporation, the agricultural irrigation equipment
supplier, reported sharply lower revenues and profits, indicating continued
pressure on farmer spending power.
The company is moving to cut costs, as it sees the
agricultural downturn extending, with farm budgets remaining squeezed.
For the three months to November 30, Lindsay reported
revenues of $110.4m, down 9.2% year-on-year.
This was well behind analyst expectations of around $119m.
Lindsay earning were just $900,000, down from $6.9m a year
ago, or $0.08 a share, well behind the $0.61 a share analysts were expecting.
Revenues from the company's irrigation segment fell by 11% year
US irrigation revenues were down 15% thanks primarily to
lower sales volumes, due to "falling commodity prices and reduced farm income"
The company's international segment saw sales down 6%,
despite improved revenues from Brazil, Africa, and the Middle East.
Tight farm budgets
Rick Parod, Lindsay's president and chief executive officer, blamed the
lower sales on squeezed farmer incomes.
"The prolonged recession in agricultural markets is
weighing on farmer sentiment toward capital goods purchases," said.
"We believe farmers are taking a wait and see approach and
deferring purchases in the current environment."
And the situation doesn't look likely to improve any time
soon, Mr Parod said.
"As the agricultural down cycle extends, weakness in
demand for irrigation equipment is expected to continue," he warned.
Mr Parod said the company would move to reduce expenses, in
response to the expectation of continued weak demand.