Brunswick reports 2Q results - Trade Only Today

Brunswick reports 2Q results

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Brunswick Corp. today reported higher marine wholesale shipments, which helped it achieve an increase in net sales and net earnings for the second quarter.

The company reported net sales of nearly $1.1 billion for the quarter, up 8 percent from $1.01 billion a year earlier.

Brunswick reported operating earnings of $107.9 million for the second quarter that included a gain from restructuring activities of $300,000, primarily resulting from the sale of idled marine properties. In the second quarter of 2010, the company had operating earnings of $55.7 million that included $24.2 million of restructuring and impairment charges.

Brunswick reported net earnings of $69.3 million, or 75 cents a diluted share, for the 2011 quarter, compared with $13.7 million, or 15 cents a diluted share, for the second quarter last year.

“Our second-quarter results reflected higher marine wholesale shipments, compared to the prior year, together with outstanding operating leverage achieved by our operating businesses,” chairman and CEO Dustan McCoy said in a statement. “Shipments of boats and engines were supported by solid retail growth experienced at our dealers, reflecting a stable marine market, combined with market share growth in our boat and marine engine segments.

“The factors that positively affected our revenues and earnings in the second quarter of 2011, compared to the previous year, included higher sales levels in our marine and fitness businesses, lower restructuring and impairment charges, companywide fixed-cost reductions and lower net interest expense,” he added. “Partially offsetting these factors were higher material costs and variable compensation expense.”

The boat segment, which includes 16 boat brands, reported net sales of $326.7 million for the second quarter, an increase of 10 percent from $296.6 million in the second quarter of 2010. International sales, which represented 39 percent of total segment sales in the quarter, increased 14 percent during the period.

The boat segment reported operating earnings of $9.4 million in the second quarter. The segment had an operating loss of $23.6 million, including restructuring charges of $21.7 million, in the second quarter last year.

Boat segment production and wholesale shipments increased during the quarter, compared with the second quarter of 2010, in response to solid retail demand and market share gains among Brunswick boat brands. Revenue growth resulted from an increase in wholesale unit shipments, partially offset by the effect of a slightly greater mix of smaller boat sales, the company said.

The marine engine segment reported net sales of $618.5 million for the quarter, up 7 percent from $579.2 million in the second quarter of 2010. International sales, which represented 41 percent of total segment sales in the quarter, increased by 6 percent.

The segment reported operating earnings of $95.5 million for the second quarter that included a gain from restructuring activities of $300,000, primarily related to the sale of idled properties. The results compare with operating earnings of $89.2 million in the second quarter of 2010 that included $2.1 million of restructuring charges.

The segment's domestic outboard engine product category experienced the greatest percentage of sales growth during the quarter. Higher sales and cost reductions had a positive effect on operating earnings during the quarter. Partially offsetting these positive factors were a less favorable product mix, higher variable compensation costs and an increase in research and development spending.

“In 2011, our strategy is to remain disciplined to generate substantial free cash flow, perform better than the market and demonstrate outstanding operating leverage," McCoy said. "The retail marine market for 2011 is unfolding generally as we expected. We continue to believe that the significant decline in overall industry marine retail demand bottomed in 2010.”

McCoy said Brunswick expects 2011 earnings per share to be in the range of 60 cents to 75 cents.

Brunswick stock closed at $20.76 a share on Wednesday. Its 52-week high and low are $27.70 and $12.54.

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