Lindsay Posts Slower Revenue Decline as Margins Shrink
The irrigation-equipment maker reported a 5% year-over-year drop in third-quarter revenue to $160.8 million.
Lindsay (LNN) reported a narrower year-over-year revenue decline in its fiscal third quarter, though profitability continued to weaken as operating margins compressed across both of its business segments.
The quarter marked a second consecutive period of sequential improvement in sales trends, following a steep 16% drop in the prior quarter. Still, the results underscored persistent pressure in North American irrigation markets and uneven demand in international regions.
Total revenues decreased 5% to $160.8 million, a deceleration from the 1% decline in the prior quarter and a sharp improvement from the 16% drop in the second quarter. Net earnings fell 19% to $15.8 million, or $1.53 a share, compared with a 55% decline in the prior quarter. Operating income declined 22% to $18.5 million, with operating margin compressing to 11.5% from 14.0% a year earlier.
The irrigation segment, which accounts for the bulk of sales, saw revenues decline 7% to $133.0 million, driven by an 11% drop in North American sales to $61.3 million. The company attributed the decline to high input costs and tempered farmer sentiment, with replacement sales making up 45% of unit volume, conversions 30%, and dryland 25%. International irrigation revenues fell 4% to $71.7 million, though foreign currency translation added $3.9 million to the total. Brazil demand remained weak due to low profitability and limited credit availability.
Operating income in the irrigation segment declined 25% to $20.3 million, with margins narrowing to 15.3% from 18.9% a year earlier. The infrastructure segment, meanwhile, posted an 8% revenue increase to $27.7 million, driven by higher road safety product sales, though Road Zipper System revenues remained subdued. Operating income in the segment held flat at $5.4 million, with margins compressing to 19.5% from 21.1%.
Backlog rose to $136.1 million at the end of the quarter, up from $117.1 million a year earlier, as a large irrigation project in the Middle East and North Africa reversed earlier declines. The company said it expects to recognize approximately $70 million of revenue from the MENA project in fiscal 2026, consistent with prior guidance. No large Road Zipper System deliveries are expected this year.
Lindsay returned $25.2 million to shareholders through share repurchases in the quarter, bringing year-to-date buybacks to $80.7 million, up from $55.5 million at the end of the prior quarter.