Titan Machinery Inc. (NASDAQ:TITN), a full-service agricultural and construction equipment retailer lowered its outlook for the current fiscal year despite its revenue increase of 31.9 percent to $410 million during the second quarter.
The company reduced its earnings expectation for 2012 to $2.10 and $2.30 per share from its previous outlook between $2.55 and $2.75 per share.
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Based on the financial statement of Titan Machinery Inc. (NASDAQ:TITN), its gross profit margin during the current second quarter was 17.2 percent compared with its 18 percent gross profit margin during the same period last year. According to the company, competitive retail environment and drought affected its second quarter gross profit margin.
Titan Machinery Inc. (NASDAQ:TITN) reported that its four business segments including equipment, parts, service and rental & other revenue sources contributed in its revenue growth. Its equipment sales generated $306 million, parts sales was $49.3 million, revenue from services was $30.5 million and its rental & other revenue sources generated $15.5 million during the second quarter this year.
Titan Machinery Inc. (NASDAQ:TITN) reported a net income of $5.21 million or 25 cents per share for the second quarter ended in July 31. The result was lower than its profit of $6.29 million or 30 cents per share during the same quarter a year ago.
The company missed the average consensus earnings expectations of analysts of 43 cents per share from $402 million estimated revenue based on data compiled by Thomson Reuters.
According to the company its income from its agricultural segment was $10.6 million compared with the $10.9 million income while its construction segment earned $628,000 compared with the$576 during the second quarter in 2011.
Titan Machinery Inc. (NASDAQ:TITN) has $126.5 million in cash and cash equivalent and its inventory was worth $938.3 million as of July 31, 2012.
In a statement, David Meyer, chairman and CEO of Titan Machinery said, “In the second quarter, we continued to make progress with our business, as we generated organic and acquired growth for both our Agriculture and Construction segments. Even though our agriculture customers experienced strengthening commodity prices midway through our second quarter, severe drought conditions in the Midwest negatively impacted customer sentiment and associated equipment margins.”
Furthermore, Meyer stated, “We are confident in our revenue forecasts due to strong agriculture balance sheets, crop insurance and record high commodity prices… We continue to execute our growth strategy with strategic acquisitions and store openings across all of our Agriculture, Construction, Rental, and International growth platforms and are excited that our acquisition growth opportunities as well as our strong organic growth have us well-positioned for the future.”
The company acquired three agriculture equipment dealerships and three construction equipment dealerships in the United States and seven agriculture equipment dealerships in Europe.
Titan Machinery also opened a new construction dealership inWindsor, Colorado and three new agriculture dealerships in Romania.