Analysts optimistic about Brunswick’s long-term future

Author:
Updated:
Original:

Analysts say Brunswick Corp.’s fourth-quarter results were not surprising, with RBC Capital Markets noting that the company’s liquidity position “leaves us optimistic from a long-term perspective.”

Thursday, Brunswick reported a 50 percent drop in marine sales for the fourth quarter of 2008, and a 42 percent decline in total sales for the period.

Total sales for the fourth quarter were $837.7 million, Brunswick said, versus approximately $1.4 billion in the same sales period of 2007.

For the fourth quarter, Brunswick reported a net loss of $66.3 million, or 75 cents per diluted share, compared to net earnings of $12.1 million, or 14 cents per diluted share, for the fourth quarter of 2007.

The boat segment reported fourth quarter net sales of $293.7 million, down 54 percent, compared to $645.2 million in the fourth quarter 2007. The marine engine segment reported net sales of $297.5 million in the fourth quarter, down 46 percent from $548.6 million in the year-ago period.

“Operationally our outlook for 2009 has not materially changed,” wrote Edward Aaron, of RBC Capital Markets. “However we are now forecasting a wider loss ($3.10 vs. $1.59 previously) to reflect higher pension expense … and a lack of income tax benefit.”

Aaron adds that he’s positive on the long-term outlook for Brunswick.

“We think the stock will become timely once the industry’s supply problem is fixed,” he said. “We’re clearly not there yet, but we think it’s a matter of quarters, not years, from here.”

Tim Conder, of Wachovia Capital Markets, said Wachovia believes its 2009 earnings per share estimate of $1.59 is “reasonable/slightly conservative, as [Brunswick] will now have additional restructuring charges for January '09 plant closures vs. our original estimates.”

Boat sales, he said, could be “modestly better” than current assumptions.

“Management’s comments that they only plan to pursue sale leasebacks if it makes financial sense, as there is no need to do this for cash, was encouraging, along with the likelihood that once retail demand stabilizes, [Brunswick] will have to ramp up production at a 50-percent-plus rate, given ’09 production plans,” Conder wrote.

Related

Registration for Outdoors Conference Opens

The Outdoor Recreation Roundtable’s June 1-2 virtual conference will include speakers and presenters from government agencies and ORR member partners.

Yamaha Sees Double-Digit Growth in Q1

The marine segment was up 7.4 percent, driven by demand for outboards in North America and Europe but tempered by supply-chain logistics.

Orion Announces SafetyPro Training

The factory-authorized courses are designed “to educate retail associates on how to match a boater’s type of boating with the different signal kits that we offer.”

A Truce on Tariffs?

The E.U. will suspend the June 1 increase of its retaliatory tariffs and agreed to negotiate with the U.S. to end steel and aluminum tariffs.

Argos 3D Forward Looking Sonar

For 20 Years, FarSounder has been developing and manufacturing 3D forward-looking sonar for vessels of all sizes.

Dometic Marine Appoints Executives

The company promotes a 20-plus-year employee and adds a vice president of aftermarket sales and e-commerce.

IMEA Launches Scholarship Program

The International Marine Electronics Alliance aims to recruit students into the field of marine technology.

RBFF Campaign Reels in Awards

The fishing-and-boating advocacy group’s Get on Board campaign was recognized by two national public relations organizations.

Suzuki’s Clean Ocean Project

Testing of the engine manufacturer’s microplastics filtering device continues as it moves closer to production. The company also released its full-year financials.