Lindsay Corp. ((LNN)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call of Lindsay Corp. presented a mixed sentiment, highlighting both achievements and challenges. The company reported strong international growth and product innovation, which were somewhat overshadowed by difficulties in the North American market and the Road Zipper business. Despite record earnings and strategic advancements, the outlook remains cautious due to ongoing market headwinds and specific segment declines.
Record Earnings and Earnings Per Share
Lindsay Corp. achieved record earnings and earnings per share for the fiscal year 2025. This success was driven by double-digit revenue and operating income growth in both the Irrigation and Infrastructure segments, marking a significant milestone for the company.
International Irrigation Growth
For the first time in its history, Lindsay’s international irrigation revenues surpassed those of North America, increasing by 39%. This growth was fueled by project sales in the MENA region and higher sales volumes in South America, showcasing the company’s expanding global footprint.
Introduction of TowerWatch
The launch of TowerWatch, a new product on the Smart Pivot platform, has been a notable success. It reduced troubleshooting time by up to 75%, contributing to a 20% year-over-year growth in annual recurring revenue, and underscoring Lindsay’s commitment to innovation.
Strong Cash Flow and Liquidity
Lindsay reported a free cash flow of 122% of net earnings, with total available liquidity exceeding $300 million. This financial strength supports the company’s balance sheet management and capital allocation priorities, ensuring stability and growth potential.
Infrastructure Segment Growth
The Infrastructure segment saw a 16% increase in revenues for the fiscal year, with a 39% rise in operating income and an improved operating margin of 24.3%. This growth highlights the segment’s robust performance and strategic importance to Lindsay.
North American Irrigation Challenges
Challenges in the North American market were evident, with irrigation revenues decreasing by 19% in the fourth quarter. This decline was attributed to lower unit sales volume and challenging market conditions, including low commodity prices and weak crop receipts.
Decline in Road Zipper Business
The Road Zipper business faced a downturn, with a 16% decrease in revenues for the fourth quarter. This was due to lower project sales and lease revenues, negatively impacting operating income and margins.
Credit Constraints in Brazil
Despite stable demand for irrigation equipment, high interest rates and ongoing credit constraints in Brazil continue to present market challenges. These factors are expected to persist, affecting the company’s operations in the region.
Impact of Trade Disruptions
Trade disruptions have been a significant concern, affecting customer sentiment and demand for irrigation equipment in North America. This ongoing issue continues to weigh on the company’s performance in the region.
Forward-Looking Guidance
Looking ahead, Lindsay Corp. anticipates continued challenges in the North American irrigation market due to low commodity prices and weak crop returns. However, international markets are showing early signs of recovery, with stable demand in Brazil and strong project sales in the Middle East and North Africa. The company plans to complete significant projects in these regions by fiscal 2026. In the Infrastructure segment, growth is expected in Road Zipper System leasing and road safety product sales, supported by the Infrastructure Investment and Jobs Act and new product introductions. Lindsay is also expanding its galvanizing capabilities and prioritizing innovation in precision irrigation.
In conclusion, Lindsay Corp.’s earnings call reflected a balanced view of achievements and challenges. While the company celebrated record earnings and international growth, it remains cautious due to market headwinds and specific segment declines. The forward-looking guidance suggests a focus on international opportunities and innovation, positioning Lindsay for future growth despite current challenges.