Analyst issues Brunswick forecast

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RBC Capital Markets is reducing its estimates for Brunswick to reflect “significant pressure and restructuring,” analyst Edward Aaron wrote in a report, which was issued prior to the release of Brunswick’s fourth-quarter earnings.

For 2009, RBC forecasts a loss of $1.59 per share versus consensus of a loss of $1.27. The 2009 forecast includes restructuring charges of $70 million versus management’s initial projection of around $30 million. Excluding restructuring in both years, RBC estimates a loss of $1.05 in 2009 versus an estimated loss of 24 cents in 2008.

“Trends in the U.S. marine industry are beyond bleak,” the report says. “Our checks indicate [fourth quarter] retail sales declines in the 50-60 percent range. … We are seeing growing signs of stress at both the manufacturer and dealer levels.”

In addition, international sales are weak, and RBC estimates an approximately 30 percent decline in marine export sales this year.

“We remain on the sidelines for now, but we see potential for opportunity,” Aaron wrote. “With the cost-cutting measures currently in place and management’s efforts to reduce pipeline inventories, we think there will likely come a point within the next 12 to 18 months when the company finally ‘catches up’ to the market.”

“We believe this will be a moneymaking event,” Aaron wrote.


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