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Hurt by HP-Ratings Lawsuit, Briggs & Stratton's Earnings Dip
Source: Milwaukee Journal Sentinel
(April 22, 2010) — Hurt by a lawsuit over engine horsepower ratings, Briggs & Stratton on Thursday reported quarterly earnings of $24.1 million, or 48 cents per share, down from $25.4 million, or 51 cents per share, a year earlier.
Adjusted for the $30.6 million lawsuit settlement, the company said it had net income of $42.7 million, or 85 cents per share, on sales of $694.6 million.
Briggs & Stratton is the world's largest maker of small gasoline engines, with many products in the outdoor power equipment.
In February, it agreed to settle more than 65 class-action lawsuits filed against the company and other outdoor power equipment makers alleging misleading horsepower labeling on lawnmower engines.
Under the settlement, Briggs and other settling defendants would establish a $51 million fund to cover consumers' claims.
Mowers sold by John Deere Co., Sears Roebuck & Co., Toro Co., and Electrolux Home Products also could be part of the settlement, along with mower engines made by Tecumseh Products.
After recognizing the litigation settlement in the third quarter, Briggs now projects that fiscal 2010 net income will be in the range of $24 to $31 million, or 48 cents to 62 cents per diluted share. This current forecast range is the same as the forecast provided in January 2010, except it now incorporates the litigation settlement and the bottom end of the forecast has been increased.
