NEW YORK (TheStreet) -- Shares of Lindsay Corp. (LNN - Get Report) are lower by -2.90% to $85.50 in early trading on Wednesday morning after the company reported a decrease in net earnings for the 2014 third quarter to $16.5 million, or $1.28 per diluted share, compared to earnings of $26.1 million, or $2.01 per diluted share for the year ago period.
The provider of range of water management and road infrastructure products and services posted a decline in revenue to $169.9 million versus $219.5 million for the 2013 third quarter.
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"We rate LINDSAY CORP (LNN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates LINDSAY CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
- LNN has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.56, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has significantly increased by 108.23% to $26.52 million when compared to the same quarter last year. In addition, LINDSAY CORP has also vastly surpassed the industry average cash flow growth rate of -4.18%.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- LNN, with its decline in revenue, slightly underperformed the industry average of 6.5%. Since the same quarter one year prior, revenues fell by 12.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- LINDSAY CORP's earnings per share declined by 30.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LINDSAY CORP increased its bottom line by earning $5.47 versus $3.38 in the prior year. For the next year, the market is expecting a contraction of 26.9% in earnings ($4.00 versus $5.47).
- You can view the full analysis from the report here: LNN Ratings Report