In order to trim down the inventory levels of lawn and garden
products manufactured at its McDonough, Georgia plant,
Briggs & Stratton Corporation
) have decided to shut down production temporarily. The decision
came in the wake of weak demand conditions for lawn and garden
equipment in the U.S. as the market was hard hit by severe drought
Per the decision, production at the facility will be closed from
October 29 to November 25, this year. The company, however, will
dispatch its products and services to customers during the
Briggs & Stratton have been trimming down its production
capacity, challenged by the lack of demand for lawn and garden
equipment. Lawn and garden market in the U.S. has declined more
than 33% since 2004.
Earlier in January, Briggs & Stratton closed down production
at its Newbern, Tennessee facility and Ostrava, Czech Republic,
plant. Moreover, the company also decided to reduce capacity at its
Poplar Bluff, Missouri, facility either by reconfiguring or by
idling certain assets.
Briggs & Stratton, in April, announced several strategic
actions to reduce cost and over-capacity. Accordingly, the company
decided to narrow down its product focus at its Auburn, Alabama,
plant and produce only V-twin (twin cylinder) engines used in
Briggs & Stratton reported fiscal 2012 adjusted earnings of
$1.15 per share, missing the Zacks Consensus Estimate of $1.24.
Total revenues dropped 2% year over year to $2 billion, failing to
meet the company's expectation of a growth in the range of 2% to
Recently, the company hiked its quarterly dividend by 9% to 12
cents, thereby increasing value to shareholders. The increased
dividend will be payable on October 1, 2012, to stockholders of
record as of August 20, 2012.
Based in Milwaukee, Wisconsin, Briggs & Stratton is the
world's largest producer of gasoline engines for outdoor power
equipment. Its wholly owned subsidiary, Briggs & Stratton Power
Products Group LLC, is North America's number one manufacturer of
portable generators and pressure washers, and is a leading
designer, manufacturer and marketer of standby generators, along
with lawn, garden and turf care products through its popular
Briggs & Stratton retains a short-term Zacks #3 Rank (Hold).
We have a long-term Neutral recommendation on the stock.
BRIGGS & STRATT (BGG): Free Stock Analysis
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