LNN · Lindsay Corporation

Lindsay Corporation's second-quarter fiscal 2026 results reflect significant pressure in its core irrigation business and a substantial year-over-year decline due to a non-repeating infrastructure project. Total revenue fell 16% to $157.7 million, with the irrigation segment declining 5% to $141.2 million. The decrease in irrigation revenue was driven by an 8% drop in North America, primarily due to lower unit sales volume resulting from persistent commodity market weakness and tempered farmer sentiment, partially offset by higher average selling prices. International irrigation revenue decreased 1%, with lower sales volumes in Brazil due to credit constraints and high interest rates limiting farmer investments, and timing of project volume in the MENA region, partially offset by growth in other regions and favorable foreign currency translation effects of approximately $4.0 million. The infrastructure segment experienced a 58% revenue decline to $16.5 million, primarily attributable to a $20 million Road Zipper System project in the prior year that did not repeat, though sales of road safety products increased. Operating income decreased 59% to $13.0 million, with operating margin contracting to 8.3% from 17.2% in the prior year, driven by lower unit sales volume, a higher proportion of international project sales volume, fixed cost deleverage in irrigation, and lower Road Zipper System project revenues in infrastructure. Net earnings declined 55% to $12.0 million, with diluted EPS falling 53% to $1.15, impacted by lower operating income and a higher effective tax rate, partially offset by increased other income. Management highlighted the beginning of deliveries for the $80.0 million MENA irrigation project, which remains on schedule and is expected to contribute approximately $70 million in revenue for the current fiscal year. The company completed $25.2 million in share repurchases during the quarter, bringing fiscal year repurchases to $55.5 million under a $150 million authorization, with $125 million remaining available. Backlog increased to $151.8 million from $127.0 million in the prior year, primarily due to the MENA irrigation project, while infrastructure backlog decreased. Looking ahead, management expects U.S. irrigation market conditions to remain soft due to trade uncertainty and commodity price pressure, anticipates Brazil to return to growth supported by secular demand drivers despite credit and interest rate headwinds, and projects growth in road safety products within the infrastructure segment, though no large Road Zipper System project is expected in fiscal 2026.