Three months ago, Lindsay dropped the idea that North American irrigation was simply bouncing along the bottom. The decline in its core farm market got worse each quarter this fiscal year, and management launched a restructuring program to run the business through a longer down cycle. The fiscal fourth-quarter report, due before the open on October 22, will show whether that defensive turn was a sensible precaution or an early sign of more trouble.
On paper, the Street is not asking for much. Consensus calls for earnings of $0.97 per share on revenue of $150.6 million. That compares with $0.99 and $153.6 million a year ago, declines of about 2% on both lines. The catch is that a 2% drop would be a clear improvement on the third quarter, when revenue fell 5% and North American irrigation sales fell 11%. Management also guided the fourth quarter lower than the third, citing a soft storm-damage season that usually supports replacement demand. For consensus to hold, the slide in irrigation has to ease noticeably, or infrastructure and international have to carry more of the load than they have so far.
The North American irrigation number is the one that matters most. Segment revenue declines went from 4% to 8% to 11% over the first three quarters. That is far worse than the low-to-mid single-digit volume declines management expected when the fiscal year began. A fourth-quarter decline in the single digits would suggest the trough is taking shape. Another double-digit drop would undercut that view. Pricing deserves equal attention, because management described increasingly aggressive competition. Irrigation margins of 15.3% in the third quarter were well below the prior year's 18.9%. The year-ago fourth quarter was weak at 13.7%, which makes for an easier comparison. If margins still fail to improve against that soft base, it would point to price erosion rather than just lower volume.
The international picture is mixed. Brazil cut its crop-plan financing rate to 11.5% from 12.5%. Management presented that as a possible spark for projects early in fiscal 2027. The same call revealed a roughly 38% cut in the FONAMI irrigation funding pool, which limits how much farmers can actually borrow. Comments on Brazilian order activity will show which force is winning. About $10 million of Middle East and North Africa project revenue has also slipped into early fiscal 2027, which adds to the pressure on this quarter.
Infrastructure offers the best chance of support. Segment revenue rose 8% last quarter, the third straight increase, and the advancing $580 billion Build America 250 Act improves long-term funding visibility. With no large road zipper project expected this fiscal year, a fourth straight quarter of growth would show the base business is gaining strength on its own. Management also reaffirmed double-digit growth in technology and recurring revenue, which helps margins at a time when equipment pricing is under strain.
The stock already reflects some of the gloom. Shares are down 10.7% since the last report, while the S&P 500 is up 4.1%. At $115.46, they sit below the 200-day moving average and toward the lower end of the post-earnings range of roughly $110 to $131. Sentiment is clearly bearish, so a figure close to consensus may not need to be spectacular to steady the stock. Investors should also look for any restructuring charges that could make reported results harder to compare with forecasts.
In the end, the report hinges on two things. First, whether the North American irrigation decline stops accelerating. Second, whether management can put concrete numbers on the fiscal 2027 restructuring savings and the capital spending relief it expects after the galvanizing plant opens in early 2027. Signs of a floor plus a clear self-help plan would support the trough narrative. Another step down in irrigation, especially with heavier price concessions, would suggest the down cycle still has further to run.