In the third quarter of fiscal 2012, we continue to see strong U.S. irrigation equipment demand, which drove revenues in the quarter to a record $172.1 million, 12% higher than last year. Irrigation sales gains and gross margin improvements across both of our business segments led to strong cash flows and higher operating margins in the quarter. Net earnings were $18.8 million or $1.47 per diluted share compared with $15.3 million or $1.20 per diluted share from the prior year's third quarter. Operating margins increased to 16.7% compared to 15.1% in the same quarter last year.Total revenues for the first 9 months of fiscal 2012 were a record high of $423.4 million, increasing 17% from the same period last year. Net earnings for the first 9 months were $34.5 million or $2.70 per diluted share compared to $30.9 million or $2.44 per diluted share for the first 9 months of fiscal 2011. Year-to-date 2012 results included a $7.2 million accrual for environmental remediation at our Lindsay, Nebraska facility. Excluding the environmental accrual, net earnings for the first 9 months of fiscal 2012 were $3.07 per diluted share, and operating margin improved to 14.2% compared to 13.2% in the same period last year. Irrigation segment sales totaled $149.6 million in the quarter, 18% higher than last year. Irrigation operating margins improved to 20.9% compared to 20.2% last year. In the U.S. irrigation market, revenues were $105.6 million for the third quarter, increasing 38% over the same period last year. Order volumes continued to be strong throughout the primary selling season, and revenues grew in virtually all U.S. regions, with the lowest growth in the drought-stricken Texas market. Commodity prices remain relatively high by historical standards, partially driven by dry weather concerns across the Midwest. The USDA projects U.S. net farm income in 2012 to be the second-highest on record and 28% higher than the 10-year average, continuing to represent positive economic conditions for U.S. farmers.
For the third quarter of fiscal 2012, international irrigation revenues decreased 12% to $44 million. As we've noted in the past, revenues in the developing markets are often more project-based and therefore tend to be less linear. Revenues in China reflected the largest regional variance due to delays in a provincial government tender. However, we anticipate China revenues to recover in the fourth quarter. Irrigation quoting activity in our international markets remain strong, and we expect that these markets will continue to be a source of growth in both the near and long-term.For the first 9 months of fiscal 2012, irrigation segment revenues increased 32% to $367.3 million. U.S. irrigation revenues were $249.1 million, increasing 39% while international irrigation revenues increased 20% to about $118.2 million, even with the delays in China revenue. Infrastructures segment revenues were $22.5 million, decreasing $4 million or 15% from the third quarter of last year due primarily to lower road safety and rail product sales. On the lower revenue base, infrastructure operating margins improved to 6.4% of revenues compared to 4.1% last year, reflecting actions taken in recent quarters to reduce product costs and operating expenses. QMB system sales were slightly lower than the same quarter last year, and we have continued to experience delays in anticipated projects. However, it is, as noted in a recent press report by the Golden Gate Bridge Highway and Transportation District, which indicated plans to move forward with movable barrier on the Golden Gate Bridge in 2013, interest continues for our QMB system and for overall solution to traffic congestion and enhancing highway workers' safety. We continue to be encouraged by the long-term opportunities in our infrastructure business. Year-to-date, infrastructure revenues were $56.1 million, a decrease of 33% due primarily to the decreasing QMB system sales for large infrastructure projects. Gross profit was $49 million or 28.5% of sales for the third quarter versus $41.5 million or 27% in the same quarter last year. Total gross margins increased in both our irrigation and infrastructure segment. Irrigation gross margin gains reflected favorable sales mix, while infrastructure gross margins improved as a result of improved pricing and road safety and diversified products, along with continued efforts to lower manufacturing costs. Read the rest of this transcript for free on seekingalpha.com