UPDATE 1-Titan Machinery cuts forecast as lower crop prices hurt demand
* Slashes full-year EPS view to $0.55-$0.75 from $1.20-$1.50
* Cuts revenue view to $2.15-$2.35 bln from $2.25-$2.45 bln
* Third-quarter EPS $0.27 vs est $0.48
* Revenue $588 mln vs est $613.3 mln
* Shares fall 11 pct to 3-year low (Adds analyst comments; updates share movement)
By Mridhula Raghavan
Dec 5 (Reuters) - Farm equipment retailer Titan Machinery Inc slashed its full-year profit forecast as a record corn harvest pulled down prices and left farmers with less money to spend on new tractors and harvesters.
Titan's shares fell as much as 11 percent to a three-year low after the company also reported a third-quarter profit that more than halved.
While the effects of the lower crop prices were expected to hurt equipment sales next year, Titan felt this impact two quarters early due partly to its geographic exposure, William Blair analyst Lawrence De Maria said.
Farmers in the U.S. Midwest, already pressured by low prices, made even less money than their peers in other parts of the country due to delayed rains.
"The outlook into next year has taken a turn for the worse, and raises the prospects for even worse results next year," De Maria said in a note to clients.
Farm profits from crops are expected to fall further in 2014.
As a result of lower farm income, Titan has been left with higher inventory, forcing it to sell its sprayers, combines and hay and forage equipment at a lower price.
Titan's gross margin fell to 15.9 percent in the third quarter from 16.2 percent a year earlier.
Margins would remain under pressure for the next two quarters as Titan looks to reduce inventory next year, Cantor Fitzgerald analyst Peter Prattas said.
Deere & Co, the world's largest farm equipment maker, said last month it expects sales of agriculture and turf equipment to fall about 6 percent next year.
Titan cut its full-year profit forecast to 55 cents-75 cents per share from $1.20-$1.50. It said it expects revenue of $2.15 billion to $2.35 billion, down from its previous forecast of $2.25 billion to $2.45 billion.
Sales from its equipment business fell 3 percent in the third quarter ended Oct. 31, accounting for three-quarters of total revenue.
Net income attributable to common shareholders fell to $5.7 million, or 27 cents per share, from $13.9 million, or 66 cents per share, a year earlier.
Revenue rose 1 percent to $588 million.
Analysts on average had expected earnings of 48 cents per share on revenue of $613.3 million, according to Thomson Reuters I/B/E/S.
Titan's shares, which have fallen about 35 percent this year to Wednesday's close, were down 7 percent at $14.82 in afternoon trading. They touched a low of $14.19. (Reporting by Mridhula Raghavan in Bangalore; Editing by Saumyadeb Chakrabarty, Maju Samuel)
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