Brunswick reports 2Q resultsPosted on
Second-quarter sales at Brunswick Corp. increased 4 percent from last year to $1.14 billion, up from $1.1 billion in the 2013 quarter, reflecting growth in outboard boats and engines, as well as parts and accessories for the marine segment.
Those gains were partially offset by revenue declines in fiberglass sterndrive and inboard boats and engines, Brunswick CEO Dustan McCoy said.
“The U.S. marine market is unfolding consistent with our annual expectations and continues to benefit from solid growth in outboard boat and engine products, as well as in parts and accessories,” McCoy said in a statement. “In the fiberglass sterndrive/inboard boat category, which also affects sterndrive/inboard engine production, modest unit growth in boats greater than 30 feet is being more than offset by declines in boats under 30 feet.”
International marine markets, however, have experienced declines in retail sales, specifically in Canada and South America, McCoy said. Consequently, first-half global marine retail demand growth is below Brunswick’s annual expectations.
The company reported net earnings of $88.6 million, or 93 cents a diluted share, for the quarter that ended June 28, compared with $80.4 million, or 86 cents a share, for the quarter a year earlier.
The company revised 2014 earnings-per-share guidance from $2.25 to $2.35 to reflect the sale of its bowling business and the planned sale of its bowling parts and accessories business.
For the second quarter this year, Brunswick reported net earnings from continuing operations of $88.6 million, or 93 cents a diluted share, compared with $79.3 million, or 85 cents a diluted share, in the quarter a year earlier.
“Our second-quarter gross margin of 27.8 percent reflected an increase of 30 basis points from the prior year,”McCoy said. “Operating expenses increased by 7 percent during the quarter. A modest improvement in adjusted operating earnings, combined with lower net interest expense, led to an 8 percent increase in adjusted pretax earnings. This increase was more than offset by a higher effective tax rate, which resulted in our lower diluted earnings per common share, as adjusted.”
The marine engine segment reported net sales of $652.4 million in the second quarter, up 3 percent from $631.7 million in the same quarter last year. International sales, which represented 33 percent of total segment sales in the quarter, increased by 2 percent. For the quarter, the Marine Engine segment reported operating earnings of $122.5 million, compared with $119.4 million in the quarter last year.
Sales increases in the quarter were led by the segment’s outboard and parts and accessories businesses, partially offset by a decline in sterndrive engines. Higher sales contributed to the increase in operating earnings in the second quarter this year, which was partially offset by the absence of favorable insurance settlements received in the second quarter last year and increased investments for long-term growth.
The boat segment reported net sales of $324.1 million for the second quarter this year, an increase of 4 percent from $310.9 million in the quarter last year. International sales, which represented 35 percent of total segment sales in the quarter, were flat, compared with the prior-year period. For the second quarter this year, the Boat segment reported operating earnings of $19.9 million, including net restructuring charges of $400,000. This compares with operating earnings of $14.6 million in the second quarter last year, including restructuring charges of $2.5 million.
The increase in sales reflected growth in outboard boats, partially offset by declines in the segment’s fiberglass sterndrive/inboard boat categories. Operating earnings benefited from higher sales, lower restructuring charges and improved net operating efficiencies.
Read about Brunswick’s conference call with investors and analysts in Friday’s Trade Only Today.