Brunswick reports 2Q results - Trade Only Today

Brunswick reports 2Q results

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Brunswick Corp. today reported its 10th consecutive quarter of earnings-per-share growth for the second quarter of 2012, reporting Generally Accepted Accounting Principles earnings guidance increases from $1.45 to $1.60 a share.

Net earnings of 90 cents a diluted share increased by 20 percent from the prior year.

Net sales, excluding divested operations, declined by 1 percent, according to Brunswick.

Gross margins increased 90 basis points from the prior year, and operating earnings increased by 6 percent from the second quarter of 2011.

“Despite challenging global economic conditions, we are pleased to report solid earnings growth in the quarter achieved by continuing to successfully execute our business strategy,” Brunswick’s chairman and CEO Dustan E. McCoy said in a statement. “We are benefiting from strong U.S. retail growth in the aluminum and fiberglass outboard marine markets and steady fundamentals in the fitness industry. However, weak demand in global fiberglass sterndrive categories has extended into the second quarter, and the overall European marketplace has deteriorated further. Our European sales, excluding divested operations, declined by $41 million or 23 percent in the quarter.”

For the second quarter of 2012, the company reported net sales of $1.07 billion, down from nearly $1.1 billion a year earlier. For the quarter, the company reported operating earnings of $114.8 million, which included $1 million of restructuring, exit and impairment charges. In the second quarter of 2011, the company had operating earnings of $107.9 million, which included a $300,000 gain from restructuring activities.

For the second quarter of 2012, Brunswick reported net earnings of $83.6 million, or 90 cents a diluted share, compared with $69.3 million, or 75 cents a diluted share, for the second quarter of 2011.

Marine engine segment

Mercury Marine Group, including the marine parts and accessories businesses, reported net sales of $591.2 million in the second quarter, up slightly from $589 million in the second quarter of 2011. International sales, which represented 34 percent of total segment sales in the quarter, decreased by 9 percent. For the quarter, the marine engine segment reported operating earnings of $104.9 million, including restructuring charges of $900,000. This compares with operating earnings of $99.9 million in the second quarter of 2011, which included a $300,000 gain from restructuring activities.

Sales were higher in parts and accessories and outboard engine businesses in the United States. This growth was partially offset by sales declines in its global sterndrive engine product category and non-U.S. outboard engine and parts and accessories businesses.

Lower warranty and variable compensation expense, as well as successful cost-reduction activities, contributed to the increase in operating earnings in the second quarter of 2012. Partially offsetting these factors was the effect of increased investments for long-term growth and higher material costs.

Boat segment

The boat segment reported net sales of $321.9 million for the second quarter, a decrease of 10 percent, compared with $356 million in the second quarter of 2011. International sales, which represented 36 percent of total segment sales in the quarter, decreased by 26 percent during the period. For the second quarter of 2012, the boat segment reported operating earnings of $8.4 million, including restructuring charges of $300,000. This compares with operating earnings of $10.1 million, which included a gain from restructuring activities of $100,000, in the second quarter of 2011.

Although dealers experienced growth at retail, the boat segment wholesale shipments decreased during the quarter, compared with the second quarter of 2011, as the seasonal reductions in dealer inventories were greater than in the prior year.

he decrease in wholesale unit shipments, including significant declines in European markets, and the absence of sales from the Sealine brand (divested on Aug. 30, 2011) were the main factors contributing to the decline in revenues and operating earnings.

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