Tire and equipment maker Titan International (TWI 1.00%) today posted third-quarter earnings results that failed to meet Wall Street's expectations. Business was once again pinched by the broader industry troubles that CEO Maurice Taylor outlined in mid-October. In that statement, Taylor warned that new equipment demand was in a major cyclical downturn and that agricultural product sales would be weak through at least 2015. This morning's results added some context to that bleak forecast. The stock was flat in early trading, hovering near its 52-week low.

Third-quarter results
Titan's third-quarter sales shrunk by 10% year over year to $450 million. As expected, demand was soft for large agricultural equipment and for bigger mining industry products. However, the revenue drop was surprisingly large: analysts were looking for Titan's sales to slip by 6% to $465 million. That revenue dip wasn't entirely due to weak demand, though: Titan also cut prices in response to a drop in its own raw material costs.

Meanwhile, Titan's profits fell harder than forecast. The company booked an overall loss of $9 million, or $0.17 a share. Analysts had expected Titan to break even on EPS. By comparison, the company managed a profit of $8 million, or $0.15 per share, in the year-ago period.

Gross profit dove to 10% of sales from last year's 13% mark. Management blamed the worsening profitability on the fact that demand slipped the hardest in its large agricultural equipment category, which tends to carry some of its highest-margin products.

Steps to improve the business
The company's plan to adjust to these challenges includes cost reductions and new product introductions. Taylor said in press release that Titan made progress on both of these fronts in the third quarter by raising efficiencies in its Ohio plant and by successfully introducing a new model of loader tires.

At the same time, layoffs at its Russia plant will bring labor costs down. The employee count will fall to 1,000 from 2,300 at that facility this year. "We are taking steps to improve the business despite these challenging markets," Taylor said.

Outlook and cash position
Management provided a fresh outlook for global demand. Large agricultural equipment sales should be weak "at least through 2015" in the North American market. Meanwhile, South America and Europe should stay flat. Russia is expected to remain a bright spot: the country delivered a 5% sales gain in the third quarter and should "slowly improve in the quarters ahead," Titan said.

As for the company's financial position, Titan finished the quarter with $180 million in cash and $526 million in debt on the books. That's a hefty debt burden, but also a slight improvement over last quarter's cash/debt stance.