What led to Lindsay Corporation (NYSE: LNN) stock rise

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Lindsay Corporation (NYSE: LNN) stock surged 8.59% on January 9th, 2020 (Source: Google finance) after the company in the first quarter of FY 20 has reported the adjusted earnings per share of 77 cents, which has significantly beaten the analysts’ estimates for the adjusted earnings per share of 50 cents, according to figures compiled by Thomson Reuters.

However, the company reported 2.3% decline in the revenue to $109.39 million from $111.95 million last year. The fall in the revenues of $3.3 million is due to the divestiture of a company-owned irrigation dealership that happened in the first quarter of fiscal 2019. The company has reported the net earnings for the quarter of $8.3 million, compared with net earnings of $1.2 million for the prior year first quarter. The backlog of unfilled orders at the end of November, 2019 was $69.2 million compared to $49.2 million at the end of November 2018. Included in these backlogs are amounts of $5.2 million and $0.3 million, respectively, that are not anticipated to be fulfilled within the subsequent twelve months.

Moreover, Irrigation segment revenues for the first quarter of fiscal 2020 fell 6% to $82.4 million compared to $87.6 million in the prior year first quarter. North America irrigation revenues fell 7% to $52.6 million compared to the previous year, although $3.3 million of the decline is due to the divestiture of a company-owned dealership. Higher irrigation equipment unit volume was offset by the impact of lower average selling prices and lower sales of replacement parts. International irrigation revenues fell 5% to $29.7 million mainly due to the negative impact of changes in foreign currency translation rates. Irrigation segment operating margin increased to 11.8 percent of sales in the first quarter, compared to 8.9 percent of sales (9.0 percent adjusted) in the prior year. This improvement in Operating margin was due to improved cost and pricing performance compared to the prior year.

Moreover, Infrastructure segment revenues for the first quarter of fiscal 2020 rose 11% to $27.0 million, compared to $24.3 million in the prior year first quarter. The increase in this segment revenue is mainly due to higher sales of road safety products along with an increase in Road Zipper System lease revenue compared to the prior year. Infrastructure segment operating margin improved to 32.4 percent of sales in the first quarter, compared to 17.1 percent of sales (17.6 percent adjusted) in the prior year first quarter. Operating margin improvement was due to a more favorable revenue mix and from improved cost and pricing performance compared to the prior year.

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