Titan Machinery Inc. TITN reported earnings per share (EPS) of 7 cents in third-quarter fiscal 2025 (ended Oct. 31, 2024), meeting the Zacks Consensus Estimate. The bottom line declined 95% from EPS of $1.32 in the year-ago quarter.
Total revenues in the reported quarter were $680 million, down 2.1% from the year-ago quarter’s $694 million. The top line, however, surpassed the consensus mark of $669 million.
Equipment revenues fell 5.1% year over year to $495 million, while parts revenues rose 5.3% to $121 million. Revenues generated from service were $51 million in the reported quarter, up 14.3% from the year-ago quarter. Meanwhile, rental revenues were down 1.6% year over year to $12 million.
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Titan Machinery’s Costs Rise, Margins Dip Y/Y in Q3
Cost of sales rose 2.4% year over year to $569 million in the quarter under review. Gross profit fell 20.2% year over year to $110.5 million. The gross margin was 16.3% compared with 19.9% in the year-ago quarter. The contraction resulted from lower equipment margins, driven by softer retail demand. Titan Machinery's aggressive drive to reduce its equipment inventory to targeted levels contributed to the decline.
Operating expenses increased 7% from the year-ago quarter to $99 million due to acquisitions in the past year. Adjusted EBITDA decreased 70.7% year over year to $15 million. The adjusted EBITDA margin in the fiscal third quarter was 2.2% compared with 7.2% in the year-ago quarter.
Titan Machinery Inc. Price, Consensus and EPS Surprise
Titan Machinery Inc. price-consensus-eps-surprise-chart | Titan Machinery Inc. Quote
TITN’s Q3 Segmental Performance
Agriculture revenues fell 9.3% to $482 million from the prior-year quarter. The downside was led by a 10.8% decrease in same-store sales, partially offset by recent acquisition. The segment’s income before taxes declined 94.7% year over year to $2 million.
Construction revenues were $85 million in the fiscal third quarter, up 10% from the prior-year quarter. The upside was led by the timing of equipment deliveries and a 10% increase in same-store sales. The segment reported a loss before taxes of $0.94 million against the year-ago quarter’s income of $4.1 million.
The Europe segment’s revenues were $62 million, down from the year-ago quarter’s $85 million due to weak equipment demand. The segment reported a loss before taxes of $1.2 million against the year-ago quarter’s income of $5.2 million.
TITN began reporting its Australia segment in the fourth quarter of fiscal 2024. The segment registered revenues of $50 million and a loss before taxes of $0.3 million in the third quarter of fiscal 2025.
Titan Machinery’s Cash Flow & Balance Sheet
Cash used for operating activities was $56 million in the first nine months of fiscal 2025 compared with $82 million used in the prior-year period. Titan Machinery ended the reported quarter with a cash balance of around $23 million.
TITN’s FY25 Guidance
The company anticipates low demand for fiscal 2025 due to decreased net farm income and broader macroeconomic uncertainty. The Agriculture segment's revenues are predicted to decline 5-10%.
The Construction segment’s revenues for fiscal 2025 are expected between a 2.5% decline and a 2.5% increase. Europe’s revenue growth is anticipated between a negative 20% and a negative 25% compared with a negative 12% to negative 17% mentioned earlier.
The Australia segment's revenues are estimated between $220 million and $230 million, updated from $230-$250 million.
The company expects the bottom line between a loss of 25 cents and earnings of 25 cents. It recorded an EPS of $4.93 in fiscal 2024. The company earlier expected the bottom line to be breakeven to earnings of 50 cents.
Titan Machinery’s Stock Price Performance
In the past year, shares of Titan Machinery have lost 38.2% against the industry’s growth of 29%.
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TITN’s Zacks Rank
TITN currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Titan Machinery’s Industry Peers
Deere & Company DE reported fourth-quarter fiscal 2024 (ended Oct. 27) earnings of $4.55 per share, beating the Zacks Consensus Estimate of earnings of $3.90. The bottom line decreased 45% from the prior-year quarter.
DE’s net sales of equipment operations (comprising Agriculture & Turf, and Construction & Forestry) were $9.28 billion, down 32.8% year over year. Sales topped the Zacks Consensus Estimate of $9.15 billion. Total net sales (including financial services and others) were $11.14 billion, down 27.7% year over year.
AGCO Corporation AGCO delivered adjusted earnings per share of 68 cents in third-quarter 2024, missing the Zacks Consensus Estimate of $1.07. The bottom line fell 83% year over year. Low commodity prices and elevated input expenses impacted equipment demand in the quarter.
AGCO’s sales decreased 24.8% year over year to $2.6 billion in the September-end quarter. The top line missed the Zacks Consensus Estimate of $2.9 billion. Excluding the unfavorable currency-translation impacts of 0.6%, net sales fell 24.2% year over year.
Penske Automotive Group PAG reported third-quarter 2024 adjusted earnings of $3.36 per share, which decreased 13.8% year over year and missed the Zacks Consensus Estimate of $3.48.
Lower-than-expected results from the Retail Automotive segment contributed to the underperformance. PAG registered net sales of $7.59 billion, missing the Zacks Consensus Estimate of $7.77 billion. The top line rose 2% from the year-ago quarter.
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