Titan Machinery warned over cautious sentiment among farmers
as it joined the ranks of agribusiness groups revealing a hit to its profits
from the poor US spring sowing conditions.
Shares in the seller of Case and New Holland equipment closed down 9.3% at $20.40 in New York.
Titan Machinery, which remained
profitable throughout the global financial crisis, said that it had ran at a
pre-tax loss of $0.7m-1.2m for the February-to-April quarter.
The loss, compared with a pre-tax profit of $12.4m a year
before, is equivalent to $0.01-0.03 per share, falling well short of Wall
Street expectations of earnings of $0.18 per share.
The fall into the red for the first time in at least seven
years reflected the cold and wet spring which cut revenue growth to about 4% in
the quarter, taking them to $440m, some $50m less than the group had expected.
Both the group's construction division and its larger
agriculture operation "were impacted by the abnormally-late spring", David
Meyer, the Titan chairman and chief executive, said.
Pre-tax profits had fallen $3.5m below targets for both the
agriculture and construction divisions.
The setback adds Titan to groups including Deere & Co, the manufacturer of John Deere farm equipment,
and The Andersons to reveal dents to performance from the poor weather.
Persistent cold and rains caused huge delays in US spring
sowings, with corn plantings proceeding at a record slow pace until last week,
when growers achieved their strongest seedings on record.
However, Titan said that the weather setback had been combined
too with "cautionary agriculture customer sentiment", an observation which tallies
with some other signs of potential market slowdown.
Creighton University said that an index of farm equipment
sales in major US agriculture sates had fallen to 52.4 this month, from 57.3 in
April, near to the 50.0 level indicating stagnation.
Its index of US farmland price growth fell for the fifth
time in six months, albeit to a "still strong" 62.1, and with values falling in
Separately, US central bank data showed a more mixed land
mark too, with strong growth in prices in states such as Iowa and Illinois contrasting
with a fall in values in Wisconsin for the first time since 2010.
Mr Meyer added that shortfalls in agriculture revenue - "primarily
a timing issue" caused by the poor weather - would be made-up later in the year.
Nonetheless, Titan reduced its estimate for earnings per
share for the full year to $1.70-2.00, from $2.00-2.30.
Analysts had pencilled in a figure of $2.30 per share.
Titan Machinery last month disappointed Wall Street by revealing a 12% decline in earnings for the November-to-January quarter, rather
than the rise in profits investors had expected.