* 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 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
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
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
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)