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Sagging Sales Push Briggs To Wider loss
WAUWATOSA, Wis. (Oct. 22, 2009) — Sagging sales of lawn mower engines and portable generators led Briggs & Stratton Corp. of Wauwatosa to report a fiscal first quarter loss of $8.7 million — more than four times bigger than a year ago.
The company's loss was $8.69 million, or 18 cents a share, compared with a loss of $1.96 million, or 4 cents, a year ago.
Sales for the three months ended Sept. 30 were down 29%, to $324.6 million from $458.2 million.
Sales are expected to fall for the full fiscal year for Briggs, which responded to the slowdown by cutting jobs and consolidating operations.
But the company continues to forecast that net income will grow in 2010 to a range of $40 million to $50 million, from $32 million in 2009. Earnings per share are forecast at 80 cents to $1.01.
The company said it's seeing higher commodity prices, as the cost of aluminum and steel have jumped in recent months, said Jim Brenn, chief financial officer.
Briggs said sales of engines for lawn mowers fell 19% in the quarter, and sales of power products — primarily portable generators — fell 36%.
"Retail sales of lawn and garden equipment during the summer months were not as robust as they were during last year's first quarter," said Todd Teske, president and chief operating officer, during a conference call with investment analysts. That led retailers to reduce inventories, with dealers of premium lawn and garden equipment slashing inventories "to levels that we have not seen for several years," he said.
Helping offset the decline in sales were cost-cutting moves the company has made, including the shutdown of its Port Washington factory, Teske said.
The company recorded $1.4 million in costs linked to the shutdown of its generator and pressure washer factory in Jefferson, announced in July.
After the announcement, shares of Briggs stock fell 44 cents, or nearly 2%, to $21.80. The shares are up 24% so far this year.
Source: Milwaukee Journal Sentinel
