Ag and construction equipment wheel and tire maker Titan International reported 3.5% fall off in revenue driven by sales decreases in each of its major business segments, including agriculture, earthmoving & construction and consumer.
Overall, net sales were $410.4 million, a $15 million year-over-year decrease. Titan management said that net sales would have increased nearly $10 million year-over-year on a constant currency basis. Sales general, administrative, research and development (SGARD) expenses were $38.5 million (9.4% of net sales). Income from operations was $4.1 million. Net income applicable to common shareholders was $1.2 million
According to the company, overall volume fell 3.5% due to continued market challenges in Russia and ag segment in Europe. It reported segment revenues in ag were down by –1.3% to $191.7 million; in construction and earthmoving by –6.4% to $176.8 million; and in consumer by –1.4% to $42 million.
Titan International Ag Segment 1Q19
|3 Months Ended
March 31, 2019
|3 Months Ended
March 31, 2018
|Income from operations||$13,928||$21,321|
Titan International reporter that lower sales volumes contributed 2.5% of the decrease in agricultural net sales, while unfavorable currency translation, primarily in Latin America and Europe, further decreased net sales by 5.7%. Favorable price/mix partially offset these decreases with a 7% positive impact on net sales. North American gross profit and margins were negatively affected by certain focused sales incentives that were implemented to drive aftermarket sales, with further negative short term impacts from higher costs of inventory from production that occurred in the fourth quarter of 2018 when there were lower volume levels. Unfavorable foreign currency translation and lower sales volumes in Russia, South America and Europe also drove the overall decrease in gross profit.