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Sep 30, 2021
Alamo Group Q3 2021 Earnings Report
Alamo Group reported third quarter results with increased net sales but decreased net income and operating income due to supply chain disruptions, labor shortages, and cost inflation.
Key Takeaways
Alamo Group's third quarter results showed a 16% increase in net sales compared to the same period last year, driven by strong demand in both the Industrial and Agricultural divisions. However, net income and operating income decreased due to supply chain disruptions, labor shortages, and cost inflation. The company's backlog reached a record high, and it completed the acquisition of Timberwolf Limited.
Total company net sales increased by 16% to $338.3 million.
Industrial Division net sales rose by 12% to $219.0 million.
Agricultural Division net sales increased by 25% to $119.3 million.
Net income decreased by 13% to $17.5 million, or $1.47 per diluted share.
Revenue by Segment
Forward Guidance
Looking ahead to the fourth quarter and 2022, the company expects to continue experiencing headwinds associated with cost inflation, supply chain disruptions, and skilled labor shortages. However, they anticipate a more traditional effective tax rate in the fourth quarter and remain optimistic about the company's long-term prospects due to a strong backlog and ongoing market momentum.
Positive Outlook
- One-time administrative costs encountered in the third quarter are not expected to repeat.
- The effective tax rate is expected to return to a more traditional level in the fourth quarter.
- The company has a very strong backlog and ongoing market momentum.
- The company is well-positioned to benefit when the supply chain issues begin to resolve.
- The company continues to invest in training its people and in improving its facilities to regain efficiencies lost in the short term.
Challenges Ahead
- The company expects to continue to experience headwinds associated with cost inflation.
- The company expects to continue to experience headwinds associated with supply chain disruptions.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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