Titan Machinery Q2 Profit Declines Despite Higher Revenues, Cuts Full-year View

(RTTNews) - Titan Machinery, Inc. (TITN) Thursday reported a decline in second-quarter profit, reflecting mainly softer equipment margins. The agricultural and construction equipment stores operator also cut its outlook for fiscal 2014, citing the challenges it face in both agriculture and construction industries.

Revenues for the quarter climbed 19 percent and topped analysts' expectations. The company noted that all four of its revenue sources contributed to the revenue growth.

David Meyer, chairman and chief executive officer of the company said, "In the second quarter of fiscal 2014, we generated solid sales for our Agriculture segment. Our higher margin parts and service sales performed well during the quarter; however, they were partially offset by lower than expected equipment margins."

In the second quarter, net income attributable to stockholders fell to $3.78 million or $0.18 per share from $5.16 million or $0.25 per share in the previous year.

On average, eight analysts polled by Thomson Reuters expected the company to earn $0.20 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter climbed 19 percent to $488.18 million from $410.07 million a year ago. Analysts expected revenue of $463.11 million for the quarter.

Equipment sales grew to $358.4 million from $306.2 million last year. Parts sales were $70.6 million, up from $57.9 million in the prior-year quarter.

Operating expenses advanced to $70.15 million from $56.51 million a year earlier.

For the fiscal year ending January 31, 2014, the company now expects net income attributable to stockholders of $25.4 million to $31.8 million, and earnings per share to be in the range of $1.20 to $1.50.

The current outlook is lower than the earlier guidance of net income attributable to stockholders in the range of $36.4 million to $42.8 million, and earnings per share in the range of $1.70 to $2.00.

Revenues are now anticipated to be in the range of $2.25 billion to $2.45 billion, down from the prior forecast of $2.35 billion to $2.55 billion.

Analysts expect the company to report fiscal year profit per share of $1.79, on revenue of $2.37 billion.

TITN is currently trading at $16.99, down 0.76 percent.