Brunswick Corp. sales increased 6 percent in the third quarter, with net sales rising to $991.9 million from $932.1 million in 2014, missing expectations by $1.85 million.
Sales rose 11 percent on a constant currency basis, indicating that the strong dollar partially offset growth.
Brunswick reported a $6.4 million profit in the third quarter in the boat segment, compared to a $7 million loss in the 2014 quarter, including net restructuring charges of $900,000.
Brunswick reported net earnings of $72.2 million, or $0.77 per diluted share, compared with net earnings of $61 million, or $0.64 per diluted share, for the third quarter in 2014. That beat estimates by $0.03.
“Our reported third quarter revenues increased by 6 percent, 11 percent on a constant currency basis,” Brunswick chairman and CEO Dustan McCoy said in a statement. “Our top line reflected strong growth rates in fiberglass outboard and sterndrive/inboard boats. This growth also included a solid performance by marine parts and accessories, outboard engines, fitness equipment and aluminum boats.”
For the quarter, the company reported operating earnings of $115.8 million, compared to $93.7 million in the prior year.
The marine engine segment reported net sales of $588.2 million in the third quarter, up 4 percent from $566.9 million in the third quarter of 2014. International sales, which represented 32 percent of total segment sales in the quarter, were down 5 percent compared to the prior-year period.
The engine segment reported operating earnings of $102.5 million for the quarter, compared to $93.3 million in 2014. Sales increases were led by the segment’s parts and accessories businesses, which included revenues from acquisitions completed in the second quarter of 2015 and during the third quarter of 2014. Higher revenues, a more favorable product mix, cost reductions and savings related to sourcing initiatives contributed to the increase in operating earnings in the third quarter of 2015. Partially offsetting these positive factors were the unfavorable effects of foreign exchange.
The boat segment — operating at a $6.4 million profit for the quarter — reported net sales of $271.3 million for the third quarter of 2015, an increase of 16 percent compared to $234.6 million in the third quarter of 2014. International sales, which represented 21 percent of total segment sales in the quarter, decreased by 16 percent. On a constant currency basis, international sales were down 6 percent.
The boat segment's revenue growth reflected a strong increase in units shipped to dealers, as well as higher average selling prices. Operating earnings benefited from higher sales and a more favorable product mix, as well as savings related to sourcing initiatives and cost reductions.
“We continue to target 2015 to be another year of strong earnings growth, with outstanding cash flow generation,” McCoy said. “Our plan reflects a 7 percent annual sales growth, which includes benefits from the success of our new products and the continuation of solid growth in the U.S. and Europe, partially offset by the negative impact of a stronger U.S. dollar and weakness in certain international markets.
“For the full-year, we anticipate a slight improvement in gross margin levels and solid gains in operating margins, as we plan to continue to benefit from volume leverage, modest positive product mix factors, cost reductions and savings related to sourcing initiatives, partially offset by foreign currency headwinds,” he said.
Read more about Brunswick’s earnings in Friday’s recap of the conference call with company executives, analysts and shareholders.