On Oct 3, Zacks Investment Research downgraded
Briggs & Stratton Corporation
) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
On Aug 15, Briggs & Stratton reported fourth-quarter fiscal
2013 (ended Jun 30, 2013) adjusted earnings of 22 cents per
share, flat with the prior-year quarter and below the Zacks
Consensus Estimate of 19 cents. On an adjusted basis, earnings
for full-year 2013 were 93 cents per share, down 19% year over
year and below management's guidance of $1.16-$1.33 a share.
Net sales decreased 4.8% year over year to $477 million in the
fourth quarter. The decline was due to a delayed spring in the
U.S. and Europe as well as the company's decision to stop selling
lawn and garden products to large mass retailers in the U.S.
Adjusted gross margin contracted 100 basis points (bps) year over
year to 17.9%. Equipment OEMs were cautious to reorder and build
more inventories as well as reacted to reducing production and
Briggs & Stratton was no exception. Though, controlling of
inventory had a positive impact on the company, it also had the
near-term impact of reducing fixed cost absorption, and thus,
lowering gross profit margins for the quarter.
Briggs & Stratton remains committed to its restructuring and
cost reduction plans. However, the ongoing global economic
uncertainty and adverse weather conditions may affect the
Following the fourth-quarter earnings release, Zacks Consensus
Estimates for fiscal 2014 and 2015 for Briggs & Stratton have
gone down 5.7% and 9.7%, respectively, to $1.16 per share and
$1.40 per share, respectively.
Other Stocks to Consider
Other companies in the industrial products sector with favorable
Zacks ranks are
Alamo Group, Inc.
Lonking Holdings Ltd.
). While Alamo and Kubota hold a Zacks Rank #1 (Strong Buy),
Lonking carries a Zacks Rank #2 (Buy).
ALAMO GROUP INC (ALG): Free Stock Analysis
BRIGGS & STRATT (BGG): Free Stock Analysis
KUBOTA CORP ADR (KUBTY): Get Free Report
LONKING HOLDING (LONKF): Get Free Report
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