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Ah, if Lindsay (LNN) was just a pure play irrigation company.

Then Lindsay wouldn’t have missed fiscal first quarter earnings by 15 cents a share yesterday, December 22.

But, on the other hand, then investors wouldn’t be able to pick up one of the few global irrigation plays on yesterday’s 5.2% drop. (Lindsay was one of the 10 stocks I recommended for 2011 in my post )

Lindsay runs two businesses. First, there’s the infrastructure business. The major products here are moveable barriers for traffic management during construction, crash cushions, and road marking and safety devices. Revenue from this business came to $29.2 million in the quarter that ended in November. That’s roughly 33% of Lindsay’s revenue for the period. Second, there’s the irrigation business. Major products here are self-propelled center pivot and laterally moving irrigation systems. Revenue for this business came to $60 million in the quarter.

The first quarter miss was attributable almost totally to the infrastructure business. Revenues there fell by 11% on lower sales of Lindsay’s QuickChange Moveable Barrier traffic systems. Since these barrier systems carry higher margins, the drop in sales of QuickChange systems, resulted in lower margins for the infrastructure segment. That dropped gross margins for the entire company to 27.2% from 30%.

Revenue for the irrigation business climbed by 13% and margins were flat on that revenue. That’s good performance from a business that sees orders spike in the late winter and early spring as farmers order equipment for the new growing season. Irrigation revenue from the United States climbed by 14% while international revenue rose by 11% from the same quarter a year earlier. The company’s backlog of unshipped orders on November 30 climbed to $60 million from $36 million on November 29, 2009.

The two businesses are likely to show the same difference in performance in the next quarter or two. Orders are strong in the irrigation businesses for the spring season, Lindsay told Wall Street in its conference call. The infrastructure business, however, is likely to face continued pressure from falling state budgets and uncertainty about Federal spending on highways. What the company called “growing interest” in the higher margin QuickChange barrier system should help gross margins but, realistically, this part of Lindsay’s business is likely to struggle with declining revenue until the next Federal highway bill passes Congress sometime in 2011.

Wall Street is looking for a big seasonal spike in revenue in the second quarter of fiscal 2011, which ends in February, with earnings growth picking up to a projected 97% for the quarter. I like the long-term prospects for the irrigation business—and as I said above, there just aren’t very many ways to play this trend. I’m be very happy to buy on the current dip to $61 or so. That puts the stock at 27 times projected fiscal 2011 (August year end) earnings of $2.25. That’s not unreasonable for a stock projected to show earnings growth of 21% for the fiscal year and that pays a 0.5% dividend. But I certainly wouldn’t chase the shares if they rally, as I expect they will, on the seasonal earnings bump.

As of December 23, I’m adding Lindsay to Jubak’s Picks with a target price of $72 a share by September 2011.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did not own shares of Lindsay as of the end of November. For a full list of the stocks in the fund as of the end of November see the fund’s portfolio at