Titan Machinery stock sank Thursday after the agricultural and construction equipment dealership chain reported preliminary second-quarter results well below expectations. The company cited a steep drop in agricultural commodity prices and high interest rates for farmers. However, S&P 500 heavy equipment names appeared to shake off the news.
The North Dakota-based operation announced late Wednesday that Q2 EPS fell 88% to around 17 cents while revenue was approximately $634 million, down more than 1% compared to a year ago. Titan management said the declines reflected lower-than-expected equipment revenues due to incrementally softer retail demand.
The company also slashed its 2025 profit view down to $0-$0.50 from its previous forecast of $2.25-$2.75 per share. The adjustment included a negative 36-cent impact for non-cash sale-lease back financing expenses, according to Titan Machinery.
Prior to Wednesday's announcement, analysts had second-quarter earnings of 48 cents per share with sales totaling $683 million, according to FactSet. Consensus had TITN 2025 earnings of $1.80 per share.
Titan Machinery stock dropped 10.3% to 13.78 during market action on Thursday. TITN shares on Wednesday edged down 0.7% to 15.37. At 8:30 a.m. ET, investors received July retail sales, weekly jobless claims as well as August readings for the Philly Fed manufacturing index and the New York Fed's Empire State manufacturing index.
S&P 500: Commodity Prices Hit TITN
"Lower commodity prices and sustained high interest rates, along with mixed growing conditions across our footprint, have negatively affected farmer sentiment," Chief Executive Bryan Knutson said in the earnings update.
Knutson added that prices for "key cash crops" have dropped sharply in 2024, retreating an additional 10%-20% in the second quarter.
As of Thursday, wheat prices are down 13% in 2024. Corn futures have declined more than 20% this year.
Knutson added the company's current focus is on reducing inventory levels as well as looking to grow its parts and service businesses.
Ahead of Thursday trade, Titan Machinery stock has already declined around 14% in August. Shares have dropped 47% in 2024.
Other heavy equipment names include S&P 500 components Deere, Cummins, Caterpillar and United Rentals.
Deere early Thursday reported better-than-expected fiscal third-quarter earnings and revenue, even as profit declined around 39% compared to a year ago. The company noted that global agriculture fundamentals were expected to remain weak as construction activity moderates. Deere also maintained its full-year income forecast of $7 billion.
"In response to weak market conditions, we have taken steps to reduce costs and strategically align our production with customer needs," Deere Chief Executive John May said in the earnings release Thursday. "Although these decisions were difficult, they are vital for our continued success and competitiveness."
Deere stock advanced 6.3% to 373.60 while Cummins stock jumped 2.6%. S&P 500 giant CAT stock gained 2.4% and URI shares added 2.6%.
Titan Machinery stock has a 29 Composite Rating out of a best-possible 99. Shares also have an 8 Relative Strength Rating and an 85 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
YOU MAY ALSO LIKE:
Is Tesla Stock A Buy Or A Sell?
Get Full Access To IBD Stock Lists And Ratings
Learning How To Pick Great Stocks? Read Investor's Corner
AI Is Fueling A 'Nuclear Renaissance.' Bill Gates And Jeff Bezos Are In The Mix.
Dow Jones Futures Await CPI Inflation Data; What To Do After Bullish Market Move
