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Jun 30, 2021
Alamo Group Q2 2021 Earnings Report
Alamo Group's Q2 2021 performance was marked by significant sales and net income growth, driven by recovering customer demand across both Industrial and Agricultural divisions, despite facing cost and supply headwinds.
Key Takeaways
Alamo Group reported a 29% increase in net sales and a 100% increase in net income compared to the COVID-impacted prior year second quarter. The company achieved record order bookings and backlog, with strong demand in both the Agricultural and Industrial divisions. However, the company faced challenges related to rising input costs, supply chain disruptions, and labor shortages.
Total company net sales increased by 29% to $347.6 million.
Net income rose by 100% to $26.0 million, or $2.19 per diluted share.
Industrial Division net sales increased by 27% to $231.2 million.
Agricultural Division net sales increased by 35% to $116.3 million.
Alamo Group
Alamo Group
Alamo Group Revenue by Segment
Revenue by Segment
Industrial Equipment Division Revenue
CapyFin.com Forward Guidance
Assuming the pandemic does not worsen, customer buying activity is expected to remain at a good level in both the Agricultural and Industrial segments through at least the remainder of 2021. However, headwinds experienced during the second quarter are expected to persist at least through the balance of 2021, with some issues potentially extending into early 2022.
Positive Outlook
- Customer buying activity expected to remain good in both Agricultural and Industrial segments.
- Supported by a backlog of almost $504 million.
- Company will continue to take appropriate price actions to address changes in cost structure.
- Company will continue to work closely with suppliers to work through ongoing supply chain disruptions.
- Company continues to invest in people, processes and equipment to expand capability to deliver the backlog as efficiently as possible.
Challenges Ahead
- Potential of a significant recurrence of coronavirus illness in communities remains an ongoing concern.
- Headwinds experienced during the second quarter are expected to persist at least through the balance of 2021.
- Ongoing shortage of computer chips can impact truck chassis and tractor deliveries and are now expected to persist into early 2022.
- Input costs for raw materials and certain industrial components continued to rise at a pace that was higher than anticipated.
- Supply chain disruptions and shipping delays adversely impacted operational efficiency.