Analysts: Brunswick weathering market

Author:
Updated:
Original:

Investment analysts say Brunswick Corp. is doing well despite the weak market, but they remain cautious and unsure about the industry’s overall recovery.

“Brunswick is performing admirably under challenging conditions,” said Tim Conder, managing director of leisure equity research for Wachovia Capital Markets, in a report following Thursday’s earning’s release.

Ed Aaron, director of equity research for RBC Capital Markets, agreed.

“The company continues to execute relatively well despite weak industry conditions,” said Aaron.

Both analysts said Brunswick revenues of $1.2 billion for the 2008 second quarter came in above expectations.

However, Conder said, “Fundamentals remain difficult.”

Inventories remain elevated at 62 percent of sales, he explained. Conder also noted that marine industry conditions “remain very challenging in the U.S. and are beginning to slow in Europe.”

Also, citing the Chapter 11 filing by Olympic Boat Centers, analysts said U.S. dealer bankruptcies will likely accelerate in the second half. Conder said the issue here would be the impact of retail repossessions and troubled dealer inventory auctions negatively impacting a more limited pool of retail demand.

Analysts say the broader question is: What will be the shape of the U.S. marine recovery?

“We feel the answer to this is more gradual and protracted than most anticipate with [the second half of 2009] the earliest for stabilization in the U.S. marine market and ’10 the earliest for the beginning of a sustainable gradual recovery,” said Conder.

“The acceleration of the decline in the U.S. boat market as dealer inventories swell heading into the offseason, leaves us cautious nearer-term,” said Aaron from RBC. “Restructuring and production furloughs address primary issues, but accelerating weakness leaves us cautious on [the second half].”

— Melanie Winters
m.winters@tradeonlytoday.com

Related

Distributor Expands ePropulsion Sales Territory

Mack Boring will now offer ePropulsion’s electric outboards in the entire North American and Central American markets.

Registration Still Open for NMMA Webinar

The March 4 State of the Industry webinar includes the presentation of the Marine Industry Customer Satisfaction Index Awards and the Alan J. Freedman Award.

Rollick Secures $8.5 million in Funding

The market strategists said Web traffic in the third quarter of 2020 was up 245 percent on a year-over-year basis.

Time to Cry Foul Over Erie Canal Changes

An act has been introduced in the waning days of New York’s annual budget process that allows no opportunity for public input.

Service to Send $1 Billion to State Wildlife Agencies

U.S. Fish and Wildlife Service will distribute funds to states to bolster conservation projects and recreational opportunities.

Quick Hits: March 1, 2021

Safe Harbor Newport Shipyard adds SF Marina floating dock array.

Patrick Supports Care Camps

The outdoors camps for children with cancer receive a first-time gift and marketing support from Patrick Industries.

Brunswick Creates Autonomy Position

The company promoted Jason Arbuckle to marine autonomy technology lead, with a focus on incorporating autonomous and driver-assist features into its product line.