Titan Profit Falls, Again Cuts FY Outlook; Stock Down - Update

(RTTNews) - Titan Machinery Inc. (TITN), an operator of agricultural and construction equipment stores, Thursday reported a lower third-quarter profit, hurt mainly by weak equipment sales and margins. Results for the quarter badly missed Wall Street estimates.

Also, Titan again slashed its earnings and revenue outlook for 2014, citing lower equipment sales and margins.

The announcement disappointed investors and Titan shares slid 7 percent in afternoon trade on the Nasdaq.

""Our third quarter financial results reflect the continuation of challenges in both the agriculture and construction industries," said Titan CEO David Meyer.

Titan has been posting weak profit due to lower margins and continues to grapple with challenges in the agriculture and construction industries.

CEO Meyer had earlier cautioned of tough conditions for the agriculture business due to weak commodity prices and an expected decline in crop output. The company will focus on cutting inventories and boosting its construction business, Meyer said.

For the third quarter, West Fargo, North Dakota-based Titan posted quarterly net income to stockholders of $5.7 million or $0.27 per share, compared with $14 million or $0.66 per share last year.

On average, nine analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Revenue for the quarter were higher at $588 million, compared with $582 million a year ago. Analysts expected revenue of $613.3 million.

Results were hurt by gross margin that fell to 15.9 percent from 16.2 percent in the prior year. Also, operating expenses climbed to $75 million from $64 million.

For fiscal 2014, the company now expects earnings of $0.55 to $0.75 per share and revenue of $2.15 billion to $2.35 billion. It earlier estimated earnings of $1.20 to $1.50 per share and revenue of $2.25 billion to $2.45 billion.

Analysts expect earnings of $1.29 per share on revenue of $2.35 billion for 2014.

Titan stock is trading at $14.80, down $1.17 or 7.33%, on a volume of 1.7 million shares. In the past year, the share has traded in the range of $14.19 - $32.00.