Titan Machinery Inc. (TITN) reported fiscal second results on Sep 9 that surprised on the Zacks Consensus Estimate by 50%. The agriculture equipment retailer also confirmed its prior fiscal 2010 earnings guidance.

Earnings per share rose to 27 cents from 19 cents a year ago. The Zacks Consensus Estimate called for 18 cents per share.

Revenues jumped 43.2% to $193.2 million from $134.9 million in the year ago period. All three of the company’s segments saw growth in the quarter. Equipment sales jumped 44.3% to $141.1 million from $97.8 million last year. Parts sales climbed 37.7% and service revenues grew 44.4% to $15.6 million from $10.8 million in the second quarter of last year.

For the first six months of the year, revenues grew 25% compared to fiscal 2009.

The agriculture equipment business remained strong as the company’s customers continued to have access to credit and were investing in equipment. They continue to purchase large tractors and combines. The construction equipment side of the business continued to be soft and was a reflection of the recession and a slowdown in the construction industry.

Titan added 2 agriculture equipment dealerships during the quarter. It also had $86 million in cash and cash equivalents as of July 31 and only $39.6 million in long-term debt.

Titan now operates a network of 68 agriculture and construction dealerships in North Dakota, South Dakota, Iowa, Minnesota, Montana, Nebraska, and Wyoming.

Reaffirmed Guidance

Titan still likes what it sees for the rest of fiscal 2010. It reaffirmed revenue and EPS guidance for the year. Revenue is expected in the range of $750 to $790 million. Earnings per share are projected between 92 cents and $1.04 per share.

Covering analysts moved to adjust their estimates based on the recent results. The third quarter Zacks Consensus Estimate fell 4 cents to 32 cents from 36 cents with 3 out of 4 analysts lowering in the last 30 days.

However, the full year Zacks Consensus Estimate jumped 4 cents to 96 with all 4 analysts raising during that time.

Value Fundamentals

Titan Machinery is now a Zacks #2 Rank (buy) stock. It is still an attractive value stock, trading at 12.5x forward earnings. Its price-to-book ratio is now 1.2. The company has a solid 1-year return on equity of 10.27%.

Read the Feb 10, 2008 article.

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