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Titan Machinery (TITN) Q2 Earnings & Sales Top Estimates, Up Y/Y

Titan Machinery's (TITN) Q2 results reflect benefits from upbeat performance across its segments, encouraging the company to raise the fiscal 2022 ear...

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This story originally appeared on Zacks

Titan Machinery Inc. TITN reported adjusted earnings per share of 57 cents in second-quarter fiscal 2022, reflecting a year-over-year surge of 97% on improved performance across all three segments — Agricultural, Construction and International. The bottom-line figure also beat the Zacks Consensus Estimate of 45 cents.



On a reported basis, the company delivered earnings per share of 50 cents in the reported quarter compared with the prior-year quarter’s 28 cents.



Total revenues in the reported quarter were $378 million, up 24.4% from the year-ago period. The top line also topped the consensus mark of $365 million. Equipment revenues jumped 35% year over year to $273 million and parts revenues were up 6.2% to $65.3 million.  Revenues generated from service came in at $29.7 million in the reported quarter compared with the prior-year quarter’s $28 million. However, rental revenues declined 13.2% to $9.9 million.

- Zacks

Costs and Margins

Cost of sales went up 26% year over year to $303 million. Gross profit increased 19.6% year over year to $75 million. Gross margin contracted to 19.9% from the year-ago quarter’s 20.7%.



Operating expenses flared up 7.5% year over year to $57.1 million due to higher variable expenses on increased revenues. Adjusted EBITDA climbed 49% year over year to $23.5 million. Adjusted EBITDA margin in the reported quarter was 6.2% compared with the prior-year quarter’s 5.2%.

Titan Machinery Inc. Price, Consensus and EPS Surprise

Titan Machinery Inc. Price, Consensus and EPS Surprise

Titan Machinery Inc. price-consensus-eps-surprise-chart | Titan Machinery Inc. Quote

Segmental Performance

Agriculture revenues grew 29.8% to $219 million from the year-ago quarter’s $169 million on strong demand for equipment. The segment’s adjusted income before taxes soared 78% year over year to $12.1 million.



Construction revenues were up 4.1% year over year to $81 million in the fiscal second quarter, driven by increased equipment sales, which was partly offset by lower parts, service and rental revenues. The segment reported adjusted income before taxes of $2.8 million compared to the year-ago quarter’s $1.4 million.



International revenues came in at $77 million, reflecting a 36.4% improvement from the year-ago period on solid equipment sales. The segment reported an adjusted income before taxes of $1.9 million as against the year-ago quarter’s loss of $0.6 million.

Financial Position

Titan Machinery used adjusted operating cash flow of around $19 million in the first half of fiscal 2022 compared with the prior-year period’s cash generation of $16.1 million. The company ended second-quarter fiscal 2022 with a cash balance of $65.6 million compared with $79 million at the end of fiscal 2021. Long-term debt, as of Jul 31, 2021, was around $64 million compared with $45 million as of Jan 31, 2021.

Guidance for Fiscal 2022

For fiscal 2022, Titan Machinery expects Agriculture revenues to increase 18-23% year over year compared with its previous guidance of 15-20% growth. The company continues to project Construction segment’s year-over-year revenue growth of 2-7%. The International segment’s revenues are projected to increase 27-32% year over year in fiscal 2022, up from the previous guidance of 17-22% growth.



Backed by the ongoing momentum in its markets, the company expects earnings per share for fiscal 2022 to lie between $2.00 and $2.20, higher than the previous estimate of $1.65 to $1.85.

Share Price Performance

Year to date, shares of Titan Machinery have gained 48.3% compared with the industry’s growth of 32.8%.

Zacks Investment Research

Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Titan Machinery currently carries a Zacks Rank #3 (Hold).



Better-ranked stocks in the Retail - Wholesale sector include Abercrombie ANF, Citi Trends, Inc. CTRN and Foot Locker, Inc. FL, each sporting a Zacks Rank #1 (Strong Buy), at present.You can see the complete list of today’s Zacks #1 Rank stocks here.



Abercrombie has a projected earnings growth rate of 576.7% for fiscal 2022. So far this year, the company’s shares have gained 75.3%.



Citi Trends has an expected earnings growth rate of 110% for fiscal 2022. The stock has appreciated 67.7%, year to date.



Foot Locker has an estimated earnings growth rate of 141% for fiscal 2022. The company’s shares have gained 44.5%, so far this year.



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