Titan Machinery, the largest Case and New Holland dealer in the world, reported declining total revenue in its first-quarter and a net loss of $13 million, though its construction equipment business saw a slight revenue uptick for the quarter.
Total first-quarter revenue came in at $594.3 million, down 5.5% year-over-year from $628.7 million in the dealership’s previous first quarter. Revenue from equipment sales specifically was down 6.7% year-over-year to $436.8 million.
Parts revenue was also down, falling 2.4% to $105.6 million, and service revenue also dropped 2.4% to $44 million in the first quarter. Rental and other revenue was the only segment to see improvements year-over-year, rising 8.2% to $7.9 million
Construction revenue for the quarter was up slightly, rising 0.9% to $72.1 million. Titan Machinery’s construction segment reported a pre-tax loss of $4.2 million, compared to a $0.3 million pre-tax gain in last year’s first quarter.
Speaking during the earnings call, Titan Machinery President and CEO Bryan Knutson said the dealership’s contractor customers are reporting a slow start to the year, but now say their backlogs are starting to build back up.
“Their attitudes are becoming more positive,” he said. “It's certainly not what it was the past two years, that's for sure. It's definitely very heavily dependent on a rate environment. So, any positive movement we did see in interest rates, even just a slightest bit, would certainly help there as well.”
First-quarter gross profit fell 25.4% to $90.9 million, and gross profit margin was down from 19.4% last year to 15.3%. This was driven by lower equipment margins, fueled by reduced retail demand and inventory management programs.
Net loss in the quarter was $13.2 million, compared to a net profit of $9.4 million in the previous first quarter.
Titan Machinery forecasts its full fiscal year construction revenue will be down 5% to 10%, though the dealership expects the segment to remain relatively stable throughout the year despite economic uncertainty.
