Lindsay Corp soars to new high on earnings
Irrigation systems maker Lindsay Corp. (NYSE: LNN) soared to a new 52-week high after reporting before the opening of trading a 17% increased in third-quarter earnings.
Strong commodity prices helped fuel the improvement, company officials said.
“Strong agricultural commodity prices driven in part by demand for ethanol have created improved conditions for farmers, which has improved the market for capital goods like irrigation equipment,” said CEO of Lindsay Corp. Rick Parod on a conference call Wednesday.
For the fiscal third quarter ended May 31, 2007, Lindsay recorded net earnings of $7.5 million, or $0.62 per diluted share, up 17% from $6.4 million, or $0.55 per diluted share, in the third quarter of last year. Irrigation equipment revenues 9% to $75.4 million, compared with $69 million in same period last year.
Lindsay expanded its revenue base with acquisitions of Barrier Systems Inc. (BSI) in the fourth quarter of fiscal 2006 and Snoline second quarter of fiscal 2007. Infrastructure revenues surged to $17.7 million from $6.0 million in the third quarter last year on the inclusion BSI and Snoline.
“We continue to avidly seek synergistic acquisitions that create differentiation opportunities,” said Parod on the call.
With the addition of Milan-based Snoline the company strengthened its global market position. The Nebraska-based company stated that it is gaining market share internationally, while it continues to maintain market share domestically.
Company officials said they believe international sales will continue to grow in response to such factors as population growth, water use efficiency and dietary changes. On account of such macroeconomic drivers, Lindsay perceives positive markets exist in China and Eastern Europe.
The company expects to outlay capital expenditures in the China market with an eye on expanding manufacturing capability. While Lindsay intends to penetrate the Chinese market, the company does not have a concrete timeline for such plans yet.
“Lindsay has an important role to play in conserving fresh water resources and feeding a growing, worldwide population,” said Parod in the press release that accompanied the earnings statement. “Higher agriculture commodity prices and concern over water resources provide favorable conditions for our irrigation segment globally. In addition, we are experiencing increased enthusiasm for our unique infrastructure products internationally.”
Lindsay repurchased shares in the third quarter, but still has a repurchase authorization for 881,000 shares.
Shares of Lindsay on Wednesday climbed 8.37% or $3.03 to $39.25, after establishing a new 52-week high of $39.63.
