TORO REPORTS IMPROVED 2Q RESULTS
May 26, 2014
Star Tribune reports:
Landscape contractors used profits generated from a banner snowplowing season to invest in new equipment for the spring and summer, helping Toro Co. to record second-quarter results, the Minnesota company said.
"Contractors who benefited from the robust snow season last winter invested in more new turf equipment during the quarter, favoring our productivity-enhancing mowers," Michael Hoffman, Toro's chief executive, said in a statement.
Demand for the company's landscape maintenance equipment, golf equipment and irrigation products also boosted sales for new Toro products.
Toro's sales for the three months ended May 2 rose 5.8 percent to $745 million from the year-ago quarter. The company earned $87.1 million, or $1.51 per share, compared with $78.4 million, or $1.32 per share, last year. Revenue and profit both exceeded analysts' expectations.
Second-quarter sales to the professional segment grew 6.5 percent to $528.6 million from the same period last year.
The same late-winter weather that made landscape contractors/snowplowers flush caused homeowners to delay purchases of seasonally sensitive lawn and garden products such as walk-behind mowers. But weather had less effect on homeowners eyeing bigger equipment.
"The more planned higher-ticket purchases, like our line of Titan zero-turn mowers, proceeded despite the weather," Hoffman told analysts on the company's quarterly conference call. Toro's residential segment sales increased 4.5 percent to $210.4 million.
Late winter weather also caused a late start to the golf season, lowering the number of rounds played and revenue of golf courses. But Toro's projections for golf equipment and golf irrigation remained positive due to planned capital improvement projects at courses.
CEO Expects Strong Year
For the six-month period, overall sales increased 3.6 percent to $1.19 billion while net earnings were $113 million, or $1.95 per share. In the same period last year, the company had earnings or $109.8 million, or $1.85 per share, on sales of $1.15 billion.
Hoffman told analysts that the company is well positioned to maintain the sales momentum of the first six months.
"Our landscape contractor business outlook remains bullish, with anticipated favorable weather and arguably our best product lineup for both contractors and acreage customers," Hoffman said.
Toro is maintaining its guidance for the rest of the year and expects revenue growth for its fiscal year, which ends Oct. 31, to be about 5 to 6 percent, and net earnings per share to be about $2.90 to $2.95 per share.