Brunswick Corp. reported first quarter earnings today, showing a slight decrease in sales for the overall boat segment from $291.8 million in the first quarter of 2012 to $289.7 million this year.
Brunswick reported net earnings of $49.8 million, or 53 cents a diluted share, for the quarter that ended March 30, an increase of 25 percent from the $39.7 million, or 43 cents a share, that the company reported for the quarter a year earlier.
The company’s overall net sales increased 4 percent and gross margins were 150 basis points higher than in 2012.
Sales increases were led by outboard marine products and parts, as well as fitness equipment, but were partly offset by declines in fiberglass sterndrive and inboard products and in the company’s bowling business, Brunswick CEO Dustan McCoy said in a statement.
“Our first-quarter results reflected solid top-line growth, combined with excellent improvements in operating and net earnings,” McCoy said. “Revenue growth in the quarter was led by U.S. outboard marine products, marine parts and accessories and fitness equipment, partially offset by declines in fiberglass sterndrive/inboard products and in our bowling businesses.”
The solid first-quarter performance and a more favorable anticipated tax rate has prompted the company to increase its expectations for 2013 diluted earnings per share from continuing operations to a range of $2.30 to $2.50, McCoy added.
For the first quarter of 2013, Brunswick reported net sales of $995.3 million, up from $959.6 million a year earlier.
“Our first-quarter gross margin of 26.3 percent reflected an increase of 150 basis points from the prior year, with the majority of the increase coming from the marine engine segment,” McCoy said. “Operating expenses increased by 2 percent due to higher research and development and SG&A expenses primarily associated with companywide investments in growth initiatives, partially offset by a gain on the sale of real estate. Lower net interest expense and a reduced effective tax rate, excluding the impact of restructuring charges and special tax items during the quarter, contributed to our higher diluted earnings per common share, as adjusted,” McCoy said.
The engine segment saw higher outboard, parts and accessories sales that were partially offset by global sales declines in the sterndrive engine category.
The engine segment, which includes Mercury Marine Group, parts and accessories, reported net sales of $521.8 million in the first quarter, up 7 percent from $489.4 million in the first quarter of 2012. International sales, which represented 36 percent of total segment sales in the quarter, were flat, compared with the prior year. For the quarter, the marine engine segment reported operating earnings of $71.5 million. This compares with operating earnings of $47.9 million in the first quarter of 2012, which included $1.7 million of restructuring charges.
The boat segment dipped slightly from last year, due in part to lingering challenges in Europe, the company said. International sales, which represented 34 percent of total segment sales in the quarter, decreased 13 percent during the period.
For the first quarter of 2013, the boat segment reported operating earnings of $2.4 million, including restructuring charges of $4.9 million. This compares with operating earnings of $10.5 million in the first quarter of 2012, including a gain of $1.5 million from restructuring.