What happened
Failing to meet Wall Street's expectations, Lindsay (LNN -0.99%) reported third-quarter 2023 financial results this morning before markets opened, and investors aren't happy. Although management waxed optimistic about the company's future prospects, the commentary wasn't enough to quench investors' thirst for the irrigation and infrastructure company to perform well in the present.
Bouncing back from their earlier decline of 11.5%, shares of Lindsay are down 6.3% as of 11:29 a.m. ET.
So what
Unable to meet analysts' expectations for $208.4 million on the top line, Lindsay reported Q3 2023 revenue of $164.6 million -- a 23% decrease compared to the same period last year. The performance on the bottom of the income statement provided additional disappointment. Suffering a 33% year-over-year decrease, Lindsay reported earnings per share of $1.53, sharply lower than the $2.15 that Wall Street had estimated.
While investors are disheartened with the top and bottom of the income statement, the middle provided a slight bright spot. Lindsay reported higher operating income margins in both its irrigation and its infrastructure segments. Compared to the third quarter of 2022, the irrigation and infrastructure segments expanded their operating margins 60 basis points to 21.6% and 140 basis points to 16.2%, respectively.
Now what
Hoping to inspire confidence in the future, Randy Wood, Lindsay's CEO, stated in the company's press release that "the impact of increased U.S. infrastructure spending and the strength of our project sales funnel support the long-term growth outlook for our infrastructure business." While this may be the case, it's important for potential investors to remain cautious. Lindsay ended Q3 2023 with a decrease of nearly 4% in its backlog compared to Q3 2022. Consequently, potential investors should continue to monitor the company's quarterly reports, looking for backlog growth as an indication that it's benefiting from increased infrastructure spending.
