QUINCY, Ill.—Titan International Inc. more than tripled its income from operations for the quarter ended June 30 on 17.7 percent higher sales.
Titan attributed the earnings improvement primarily to production efficiencies driven by increased volume. Higher materials costs, especially steel, partially offset these gain, however, Titan said.
Second quarter income from operations jumped 268.2 percent to $16.2 million on sales of $428.9 million.
The quarterly sales increase was Titan's sixth consecutive quarter of double-digit improvements, President and CEO Paul Reitz noted.
Despite the challenges of a rise in global trade protectionism and a constantly evolving business landscape, "we continue to believe that Titan's global operations are on a positive track overall," Reitz said,
"Many of the OEMs and dealers I've spoken with across our businesses continue to view future demand in a positive light," he said, "but are watchful of the issues resulting from global tariffs and a decline in grain prices."
The U.S. government's tariffs on steel have resulted in the highest steel costs Titan has experienced in more than 10 years, he said, and while natural rubber prices remain at lower levels, the company is facing rising costs for synthetic rubber, carbon black, bead wire and chemicals.
In addition, Reitz said, the growing U.S. economy keeps pushing the strength of the dollar, creating currency headwinds for Titan, primarily in Latin America and Russia.
Adjusted EBITDA for the six-month period more than doubled to $74.7 million from $31.7 million on 18.3 percent higher sales of $854.3 million. Titan said volumes were up in all segments but attributed the lion's share of the growth to the earthmoving/construction segment, which experienced sales growth of 35.3 percent.
Titan anticipates reporting fiscal 2018 EBITDA of $98 million to $109 million, which would be an 80 percent to 100 percent improvement over 2017. Sales are expected to grow between 9 and 12 percent over 2017.