Brunswick Corp. today reported third-quarter net sales of $932.1 million, up from $824.4 million a year earlier, with increases in both the engine and boat segments — albeit with a $7 million operating loss in the boat segment — causing the company to raise its full-year earnings guidance to $2.30 to $2.35 a share.
For the quarter that ended Sept. 27, the company reported operating earnings of $93.7 million that included $900,000 of net restructuring, exit and impairment charges. During the quarter last year the company had operating earnings of $62.7 million that included $2.6 million of restructuring, exit and impairment charges.
Third-quarter net earnings rose to $61 million, or 64 cents a diluted share, from $57.2 million, or 61 cents a share, last year.
An improvement in the boat segment’s operating loss was a result of higher sales and lower restructuring charges.
“Our third-quarter revenues increased by 13 percent, with U.S. sales up 15 percent and international markets up 10 percent,” Brunswick CEO Dustan McCoy said in a statement. “Our top line reflected double-digit growth in each of our three segments.”
“Our performance benefited from recent investments in growth initiatives, with several new products being introduced into the marketplace, along with increases in production rates and capacity,” McCoy said.
“Sales growth was also driven by improvements in outboard boats and engines, marine parts and accessories, fiberglass sterndrive/inboard boats and fitness equipment, partially offset by revenue declines in sterndrive engines,” he said.
Marine engine segment
The marine engine segment reported net sales of $566.9 million in the third quarter, up 11 percent from $511.1 million in the quarter last year.
International sales, which represented 34 percent of total segment sales in the quarter, increased by 12 percent. For the quarter, the Marine Engine segment reported operating earnings of $93.3 million. This compares with operating earnings of $75.2 million in the quarter last year.
Sales increases in the 2014 quarter were led by the segment’s outboard and parts and accessories businesses, partially offset by a decline in sterndrive engines. Higher sales, benefits from new products and continued favorable warranty experience contributed to the increase in operating earnings in the third quarter this year.
The boat segment reported third-quarter net sales of $234.6 million, an increase of 22 percent from $191.7 million in the quarter last year.
International sales, which represented 29 percent of total segment sales in the quarter, increased 5 percent from the prior-year period.
For the third quarter this year, the boat segment reported an operating loss of $7 million, including net restructuring charges of $900,000. This compares with an operating loss of $16.9 million in the quarter last year, including restructuring charges of $2.6 million.
The increase in sales reflected balanced growth between outboard and fiberglass sterndrive/inboard boats. The improvement in the segment’s operating loss was a result of higher sales and lower restructuring charges.
“Although category and regional strengths and weaknesses exist in the marine and fitness markets, the demonstrated resiliency of both marine participation and the overall commercial fitness market and the continued successful execution of our growth strategy give us the confidence that we can achieve the financial targets outlined in our 2016 plan, absent any significant changes in global macroeconomic conditions,” McCoy said.
“During the fourth quarter we expect our businesses will continue to benefit from several new-product introductions, along with increases in production rates and capacity. Market acceptance of these products has been excellent, and as a result, our plan reflects strong revenue growth rates in the fourth quarter of 2014.”