Titan International Sales Miss on Weak North American Farm Demand

Titan International posted a 7% drop in second-quarter sales to $420.6 million, missing the $423.6 million Wall Street consensus. The wheel and tire maker earned $0.11 a share on an adjusted basis, down from $0.16 a year earlier. The profit figure matched analyst expectations.

Demand for agricultural tires, which account for roughly half of Titan's revenue, fell 9% from a year ago. Dealers and original equipment manufacturers in North America are pulling back after a strong run in 2024 and early 2025, CEO Paul Reitz said on the earnings call. "The farmer is cautious," Reitz said. "They are sitting on good crops but watching input costs and interest rates."

Earthmoving and construction tire sales, Titan's second-largest segment, slipped 2%. The consumer tire business, a smaller piece of the portfolio, rose 3% on replacement demand in Latin America.

Gross margin narrowed to 17.8% from 19.2% a year ago. Higher raw material costs and underabsorbed factory overhead squeezed profitability as volumes fell. Titan's steel wheel and rim business, which supplies the same markets, saw sales decline 5%.

Reitz pointed to a bright spot in Europe, where farm tire sales rose 5% on stronger tractor production in Germany and France. The company's Brazilian operations also grew, driven by sugarcane and grain hauling demand. "Outside of North America, the tone is better," Reitz said. "We are seeing pockets of real strength."

Titan's transformation program, led by Chief Transformation Officer David Martin, targets $30 million to $35 million in annual cost savings by mid-2027. Martin said the company has locked in about $12 million in procurement savings so far this year by consolidating rubber and steel suppliers and renegotiating freight contracts. A plant-floor efficiency push at its Freeport, Illinois, and Bryan, Ohio, factories is expected to add another $8 million to $10 million in savings by year-end.

Free cash flow swung to negative $8.2 million in the quarter from positive $4.1 million a year ago. Titan built inventory ahead of the autumn harvest season. Net debt rose to $238 million from $215 million at year-end, though the leverage ratio held at 2.3 times trailing EBITDA.

Titan maintained its full-year revenue guidance of $1.7 billion to $1.8 billion, implying a stronger second half. Reitz said he expects North American dealers to start restocking once harvest begins in September and the outlook for fall fertilizer and chemical applications becomes clearer. "The pipeline is lean," Reitz said. "When the farmer starts buying again, we will see it fast."