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Titan slumps as it post another full-year loss

Sales have almost halved in the past three years, although if you look hard enough there are signs that things are picking up
tractor in a field
Sales picked up in the final quarter of 2016, a trend management expects to continue in 2017

Shares in Titan International Inc (NYSE:TWI) slumped on Wednesday after the off-road tire specialist saw sales falls again as it posted another full-year loss.

For the 12 months to December 31 2016, Titan posted net sales of US$1.27bn, down almost 10% from the US$1.39bn it reported a year earlier as the earthmoving and construction sectors remained in “cyclical downturns”.

Since the Illinois-based company generated record revenues of US$2.2bn in 2013, Titan’s sales have fallen every year, quite sharply as well.

The loss from operations for the year came in at US$21.3mln, which was slightly better than the US$24.3mln loss it recorded in 2015. That was mainly down to improved margins.

On a per share basis, the firm made an adjusted loss of US$0.81, much higher than Wall Street expectations of a US$0.09 loss.

That said, the fourth quarter performance did offer some hope for investors.

The wheel and tire supplier posted revenues of US$307.3mln in the final quarter of 2016, higher than the US$305.5mln analysts had forecast and also ahead of the previous quarter’s sales.

“In connection with our 2016 third quarter earnings release, I stated that I thought we had reached the bottom on revenue,” said chairman Maurice Taylor.

“I continue to believe this is correct and that 2017 will demonstrate this. We believe that there are many opportunities ahead and our team is excited about what Titan has in front of us this next year.”

President and chief executive Paul Reitz added: “Although sales have continued to decline from our peak in 201, we continue to be encouraged by the operating progress we have made.

“Fourth quarter 2016 sales were actually higher than third quarter sales and relatively flat as compared to the US$307.8mln in fourth quarter 2015.”

Shares were down 10% on Wednesday morning to US$11.10.

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