QUINCY, Ill.—Titan International Inc. fell into the red on an operating and net basis in the quarter and six months ended June 30. It was impacted by the negative effects of lower sales, elevated operating costs and currency devaluations.
These results, and the market volatility of the past 90 days or so, have prompted Titan management to revise the firm's financial outlook for fiscal 2019. The company now sees its adjusted pre-tax operating income (EBITDA) ranging between $75 million and $90 million for the year, down measurably from the $119 million in 2018.
Sales likely will be flat to down 3 percent from the $690 million reported in 2018.
For the second quarter, Titan fell $9.9 million into the red on an operating basis on 8.9 percent lower sales of $390.6 million. The company reported a $10.2 million operating profit a year ago. The net loss was $6.42 million, compared with net earnings of $8.44 million a year ago.
"Our second quarter results reflect a continuation of the difficulties we faced in the first quarter from the global tariff battles and challenging farming conditions in the U.S. as we experienced declines in our sales and margins," President and CEO Paul Reitz said.
"All you have to do is spend a little time driving around the Midwest to see how tough things are for farmers right now. Much of the second quarter, from an ag perspective, was dominated by news involving bad weather, local flooding, prevented planting, poor crop conditions, negative farmer sentiment, and of course the ongoing trade battle. All this has created short-term uncertainty that has significantly impacted demand within the aftermarket and certain OEMs.
"It is important to note, however, that we did not see a decline in our market share during this period, and we believe our positioning with customers remains strong. The ongoing global tariff battles, along with weather-related uncertainties, make near-term visibility extremely challenging for Titan and others within our industry," he added. "We believe that higher corn and soybean prices could lead to improvements in the Ag sector in the not too distant future, but weather and trade concerns may continue to mute demand in the short-term."
For the six months ended June 30, Titan was $6.97 million in the red on an operating basis, versus $25.3 million in earnings a year ago. Sales were off 6.3 percent to $801 million. The net loss was $5.88 million, versus earnings of $19 million in 2018.