Lindsay Corporation ( LNN ) shares are trading higher on Thursday after reporting strength in infrastructure unit in third-quarter results.

The company reported quarterly earnings per share of $1.85, beating the street view of $1.17.

Third-quarter revenues totaled $139.20 million (down 15% year over year), missing the analyst consensus of $144.36 million, as market conditions in the irrigation segment continue to weigh on farmer sentiment, resulting in demand softness. 

However, the company gained strength in the infrastructure business, supported by new project sales and momentum in leasing revenues of the Road Zipper System.

Infrastructure segment revenues for the quarter were $24.4 million, up 11% year over year.

“The growth and margin expansion we achieved in our infrastructure business for the quarter helped to offset some of the softness in the irrigation business,” said Randy Wood, President and Chief Executive Officer.

Operating margin was 14.3%, down from 16.4% in the prior year quarter. The decrease in operating income and margin resulted mainly from lower irrigation segment revenues and the impact from deleverage of fixed operating expenses.

This decrease, however, was partially offset by improved operating income and operating margin in the infrastructure segment.

The backlog of unfilled orders as of May-end, was $246.9 million compared with $94.5 million as of May 31, 2023.

“We expect demand in North America to remain tempered until the outlook for net farm income improves. Similarly, we expect current market conditions in Brazil to temper demand for irrigation equipment in the near term, while we remain confident in the longer-term growth opportunity in that market,” the CEO added.

Price Action: LNN shares are trading higher by 9.33% to $123.78 at last check Thursday.

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