) reported record earnings per share of 53 cents in the first
quarter of 2013, up 61% from 33 cents earned in the year ago
quarter and up 23% from the Zacks Consensus Estimate of 43 cents.
Reported earnings were also well above management guidance of 40
cents to 45 cents per share. The outperformance was led by strong
channel demand for large turf equipment and continued growth of
micro irrigation sales.
Sales increased 5% year over year to a record $444.7 million
but fell short of the Zacks Consensus Estimate of $462 million.
The improvement was mainly driven by the Professional segment,
which helped offset the decline in the Residential segment.
Gross profit increased 13% year over year to $166 million with
gross margin expanding 270 basis points to 37.3%. Selling,
general and administrative expenses increased 6% year over year
to $119 million. Operating income rose 36% year over year to
$46.2 million in the quarter with operating margin expanding 240
basis points to 10.4% in the quarter.
Professional: Sales for the segment increased 16% year over
year to $329 million in the quarter. The segment's operating
profit increased 43% to $60.4 million. The segment witnessed
higher demand for large turf equipment in the domestic market.
The successful launch of products acquired from Astec Underground
Inc., a wholly-owned subsidiary of
Astec Industries, Inc.
) and Stone Construction acquisitions, also led to the
outperformance in the quarter. Toro utilized the increased
capacity to meet the steadily growing demand for micro-irrigation
systems. However, international sales were weak in the
Residential: The segment reported sales of $120 million, down
12% year over year, affected by weak demand for snow products due
to unseasonable winter weather in North America. Operating income
dropped 4% to $12.1 million.
Cash and cash equivalents were $60.8 million as of Feb 1,
2013, down from the $71.8 million as of Feb 3, 2012. Cash flow
used in operating activities during the quarter was $23.5 million
compared with $16.3 million in the prior-year quarter. As of Feb
1, 2013, the debt-to-capitalization ratio improved to 41.7% from
46.5% as of Feb 3, 2012.
Toro also announced that it has entered into an agreement to
acquire a Chinese micro-irrigation company. The acquisition is
subject to applicable regulatory approval and other customary
closing conditions. This acquisition will help strengthen the
company's presence in China, a critical growth market.
For fiscal 2013, Toro affirmed its revenue growth expectation
of around 4% to 5%. The company, however, raised its earnings per
share guidance to $2.40 to $2.45 from the previous range of $2.35
to $2.40 to reflect the benefit of tax rate improvement. For the
second quarter, net earnings are expected to be around $1.20 per
Toro will continue to benefit from the strong performance of
the golf industry. Recent snowfall across the company's primary
snow markets, including the record-breaking blizzard that struck
the Northeast will provide a boost to autumn pre-season snow
product sales. Furthermore, Toro's new product offerings and
newly Toro-branded products from Astec and Stone Construction
acquisitions from 2012 are being received well by consumers. The
company currently retains a short term Zacks Rank #3 (Hold).
Bloomington, Minn-based Toro Co. is a worldwide provider of
turf and landscape maintenance equipment, and irrigation
solutions, to help customers care for golf courses, sports
fields, public green spaces, commercial and residential
properties, and agricultural fields. The company operates through
its two segments- Professional and Residential.
Lincoln Electric Holdings Inc.
) reported fourth-quarter 2012 earnings of 79 cents per share, up
16% from 68 cents in the year-earlier quarter and ahead of the
Zacks Consensus Estimate of 74 cents.
) announced fourth-quarter 2012 earnings per share of $1.43,
above the Zacks Consensus Estimate of $1.37 and the prior-year
quarter's earnings of $1.27.
ASTEC INDS INC (ASTE): Free Stock Analysis
LINCOLN ELECTRC (LECO): Free Stock Analysis
SNAP-ON INC (SNA): Free Stock Analysis Report
TORO CO (TTC): Free Stock Analysis Report
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