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Titan Machinery Misses on Q1 Earnings, Lowers FY25 View

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Titan Machinery Inc. (NASDAQ: TITN) reported earnings per share of 41 cents in first-quarter fiscal 2025 (ended Apr 30, 2024), which missed the Zacks Consensus Estimate of 67 cents. The bottom line marked a 66% plunge from EPS of $1.19 reported in the year-ago quarter due to lower equipment gross margins and incremental floorplan interest expenses. TITN’s results reflect weak demand and high levels of inventory in many product categories.

Total revenues were $628.7 million, up 10.4% from the year-ago quarter. The top line missed the consensus mark of $664 million.

Equipment revenues gained 9% year over year to $468 million and parts revenues were up 12% to $108 million. Revenues generated from service were $45 million, up 29% from the year-ago quarter. Meanwhile, rental revenues were down 16% year over year to $7.3 million.

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

Costs and Margins

The cost of sales was up 12% year over year to $507 million. Gross profit increased 2.7% year over year to $121.8 million. The gross margin was 19.4% compared with 20.8% in the year-ago fiscal quarter.  Margins were down due to lower equipment margins driven by high levels of inventory and weak demand.

Operating expenses increased 22% from the year-ago quarter to $99 million due to acquisitions. Income from operations was $22.6 million compared with $37.3 million in the year-ago quarter.

Adjusted EBITDA plunged 45% year over year to $24 million. The adjusted EBITDA margin was 3.8% compared with 7.6% in the year-ago quarter.

Floorplan interest expense and other interest expenses totaled $9.5 million compared with $2.5 million in the first quarter of fiscal 2024. The increase was due to a higher level of interest-bearing inventory, including the usage of existing floorplan capacity to finance the O’Connors acquisition.

Segment Performances

Agriculture revenues rose 6% from the last fiscal year’s comparable quarter to $447.7 million. The upside was driven by benefits from the acquisition of …

Full story available on Benzinga.com

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