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Brunswick earnings estimate lowered

Analysts at RBC Capital Markets are lowering their sales and earnings estimates for Brunswick Corp. to reflect significant downward pressure on wholesale shipments.

"While retail trends appear in line with expectations, many dealers are simply unwilling/unable to replenish inventory in light of extremely depressed demand, excessive aged inventory and very tight floorplan lending standards," said Edward Aaron, senior analyst with RBC, in a recent report.

RBC now expects Brunswick to report sales of $746 million for the first quarter of 2009. This is below RBC's previous guidance of $906.3 million and below consensus of $790 million. The forecast assumes a 45 percent decline in total company sales, including a 54 percent decline for the marine segments.

RBC forecasts a loss of $1.11 per share for Brunswick's first quarter, compared to previous guidance of a loss of 95 cents per share. For the year, RBC forecasts a loss of $3.26 per share, compared to earlier estimates of a $3.10 per share loss.

"The silver lining of depressed shipments is that the bottom could come sooner," Aaron said in his report. "We will view [Brunswick] shares as timely when we get the sense that dealers are resuming normal stocking patterns. The timing of this remains very unclear, but anemic dealer orders in 2009 increase the probability of this happening by 2010."

Brunswick will release its first quarter earnings report Thursday before the market opens.



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