Brunswick will likely turn profitable in 2011, analyst says

Posted on January 29, 2010

Brunswick Corp. is well-positioned to expand its market share and profitability as the recovery unfolds into 2011, said Tim Conder, a senior analyst with Wells Fargo Securities.

Brunswick on Thursday released its fourth-quarter results, which showed a 22-percent drop in net sales, and a 38-percent decrease in net sales in the boating segment. However, the company also ended the year with improved liquidity and lower inventory levels.

Conder said Brunswick's earnings were generally "in line" with Wall Street's expectations, though The Wall Street Journal reports the earnings were "slightly worse than analysts expected."

"We continue to applaud management's execution in what has likely been one of the worst marine downturns in history," Conder said in his report. "We feel that [Brunswick's] losses will materially narrow in '10 vs. '09 and that the company will likely turn profitable in '11.

"We believe [Brunswick's] shares will trade in a narrow range until likely April/May when visibility on peak seasonal boat sales emerges," he added. "We would continue to utilize volatility to add this value cyclical name to portfolios."

Brunswick stock closed Thursday at $11.22 per share, down from its open that morning of $12.31 per share.

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