Commodities & Metals

After Drought & Titan Warning, U.S. Farm Equipment Sales Not So Bad After All

If you were just focused on the poor earnings report from Titan Machinery, Inc. (NASDAQ: TITN) in agricultural equipment sales this week, the report may be a one-off item.  Still, the news was bad enough that it dragged down shares…

By Jon C. Ogg
Published September 11, 2012, 12:37pm ET · 2 min read

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If you were just focused on the poor earnings report from Titan Machinery, Inc. (NASDAQ: TITN) in agricultural equipment sales this week, the report may be a one-off item.  Still, the news was bad enough that it dragged down shares of Deere & Company (NYSE: DE) which is many times the size of Titan. AGCO Corporation (NYSE: AGCO) was pulled down as well and it is much larger than Titan too.

Now we have news out of the Association of Equipment Manufacturers showing that retail farm equipment sales posted some healthy gains in the month of August.  It should be noted that all three players today are trading higher on a snapback. Yesterday’s news was even bad enough to hit the Market Vectors Agribusiness ETF (NYSEMKT: MOO), and its shares have recovered some today as well.

The one caveat we would note is that Titan’s issue that was brought up was an issue pertaining to profits more than it was to sales.  That being said, you might argue that the unit growth might have been based upon very attractive equipment prices.

It is still a bit soon to say for the current quarter’s major ag-equipment players.  There could even be a boost being tied here based upon drought insurance.  Again, that may be too soon to consider as gospel as well.

AEM membership is made up of over 850 companies and over 200 product lines in the agriculture, construction, forestry, mining and utility sectors worldwide.

JON C. OGG

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Jon C. Ogg

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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