In order to counter the winter woes,
Briggs & Stratton Corporation
(
BGG
) has announced two snow blower engines that can work at
temperatures as low as -20 degree Fahrenheit. The new powerful 750
Series and 950 Series engines will enable the homeowners to clear
off snow more effectively from their driveways or walkways.
The new engines have inbuilt freeze-resistant recoil starter and a
Magnetron electronic ignition. The engines deliver quick and
reliable performance every time and are powerful enough to cut
through snow.
These new engines further augments Briggs & Stratton's engine
portfolio and are expected to be widely accepted by the customers.
The new products will help in driving revenues even amid a
difficult macroeconomic scenario.
Briggs & Stratton is facing severe challenges in its lawn and
garden products business as certain regions in the U.S. have been
hit hard by the drought conditions. The company is experiencing a
dearth in demand for lawn and garden equipment as the lawn and
garden market in the U.S. has declined more than 33% since 2004.
Accordingly, Briggs & Stratton decided to shut down production
temporarily at its McDonough, Georgia plant to cut down its
inventory level. The company, in April, implemented several
strategic plans to reduce cost and over capacity to combat
challenges of soft demand.
The prevailing softness in the U.S. as well as the European markets
remains a headwind for the company. Moreover, the drought condition
in the U.S. is also expected to impact its business, thus reducing
its sales. In addition, the company faces tough competition from
Honda Motor Co., Ltd
(
HMC
) and other small Japanese and Chinese engine manufacturers.
Wisconsin-based Briggs & Stratton is a leading producer of
gasoline engines for outdoor power equipment. The company's wholly
owned subsidiary Briggs & Stratton Power Products Group LLC
produces portable generators and pressure washers, and designs,
manufactures and markets home standby generators, along with lawn
and garden and turf care.
Briggs & Stratton retains a short-term Zacks #5 Rank (Strong
Sell). We have a long-term Underperform recommendation on the
stock.
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