WEST CHICAGO, Ill. — Titan International Inc. reported 19.3% higher pre-tax operating income for the quarter ended March 31 despite slightly lower sales.
Titan did not publish an outlook for the remainder of the year, other than to say management expects the company's financial performance "to remain at a high level … due to healthy market conditions globally across the markets we serve, particularly in large agriculture."
First quarter EBITDA rose to $68 million, while sales revenue fell 1.3% to $548.6 million, improving the operating ratio to 12.4%.
Titan said the sales decrease was due to an unfavorable impact of foreign currency translation of $8.1 million, primarily due to the weaker Euro, and the loss of $10 million in sales related to the divestment in the first quarter of 2022 of the firm's Australian wheel business. The sales decrease was offset partially by increased sales volume and favorable price/product mix, Titan said.
Titan attributed the earnings improvement to productivity initiatives across global production facilities, cost reduction and lower production input costs including freight.
Net income jumped 36% to $33.4 million.
Sales revenue fell in all three of Titan's operating segments: down 1.2% in the agricultural segment to $305.9 million; down 1.2% in the earthmoving/construction segment to $198.9 million; and down 2.8% in the consumer segment to $45.1 million.
Gross profit, on the other hand, was up in all three segments.
Titan chairman Paul Reitz expressed confidence in the company's fortunes for the remainder of 2023, noting that high farmer income supported by solid prices for corn and wheat combined with lower input costs, as well as high replacement needs for an aging large equipment fleet, "are expected to support continued healthy demand for our products over the mid to long-term time horizon."
Likewise, the earthmoving and construction markets are expected to continue in a positive manner this year, Reitz said, given low equipment inventory levels throughout the global construction industry and solid non-residential activity. Additionally, mineral commodity prices are at relatively high levels, which also supports growth.