Titan International’s first quarter was met with a negative market reaction, as investors focused on margin pressure despite the company surpassing Wall Street’s revenue expectations. Management attributed the revenue performance to resilient demand in Brazil’s agricultural sector and stable aftermarket sales in the consumer segment, which offset weaker original equipment manufacturer (OEM) demand in the U.S. and Europe. CEO Paul Reitz described the quarter as “solid,” but acknowledged that ongoing industry uncertainty and muted agriculture equipment orders weighed on profitability. The company also highlighted its operational flexibility, noting that its diversified production footprint enabled it to meet unexpected customer orders without major disruption.
Is now the time to buy TWI? Find out in our full research report (it’s free).
Titan International (TWI) Q1 CY2025 Highlights:
- Revenue: $490.7 million vs analyst estimates of $464.2 million (1.8% year-on-year growth, 5.7% beat)
- Adjusted EBITDA: $30.82 million vs analyst estimates of $27.54 million (6.3% margin, 11.9% beat)
- Revenue Guidance for Q2 CY2025 is $475 million at the midpoint, below analyst estimates of $485.3 million
- EBITDA guidance for Q2 CY2025 is $30 million at the midpoint, below analyst estimates of $30.71 million
- Operating Margin: 2.5%, down from 6.5% in the same quarter last year
- Market Capitalization: $587.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Titan International’s Q1 Earnings Call
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Michael Shlisky (D.A. Davidson) asked about Titan’s raw material sourcing and the impact of new tariffs on rubber and steel. CEO Paul Reitz explained most rubber is sourced from West Africa and steel domestically, minimizing tariff exposure, and noted OEM contracts allow for pass-through of material cost changes.
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Michael Shlisky (D.A. Davidson) inquired about the global outlook for agriculture markets, specifically Brazil’s strength versus U.S. weakness. Reitz said, “We’re doing extremely well in Brazil,” citing diversified manufacturing and customer reach as key to Titan’s resilience.
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Steve Ferazani (Sidoti) questioned how lessons from previous trade wars inform current strategy, especially for the aftermarket segment. Reitz emphasized production flexibility and the ability to shift manufacturing locations as advantages in managing trade disruptions.
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Steve Ferazani (Sidoti) sought details on the expanded Goodyear licensing agreement. Reitz described the new arrangement as a significant opportunity, stating it allows Titan to apply the Goodyear brand to former Carlstar products and accelerate synergy realization.
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Derek Soderberg (Cantor Fitzgerald) probed the expected impact of tariffs in the coming quarter and the stability of EBITDA. CFO David Martin responded that only about 10% of revenue is exposed to new tariffs, and strategic sourcing should keep the impact manageable.
Catalysts in Upcoming Quarters
In the next several quarters, the StockStory team will monitor (1) the pace at which Titan’s Goodyear-branded product rollout captures share in non-agriculture segments, (2) any rebound in OEM order visibility and North American agriculture demand, and (3) management’s ability to sustain margin improvement through cost control and supply chain flexibility. Developments in global trade policy and the company’s progress in expanding military and light industrial market penetration will also be important to watch.
Titan International currently trades at $9.58, up from $7.32 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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