Brunswick reports marine sales decline
LAKE FOREST, Ill. – Boating industry giant Brunswick Corp. (NYSE: BC) expects to meet its estimates for the second quarter, but its expectations for the rest of the year aren’t as bright.
In fact, the company says it will cut production to reduce inventory levels, which it expects to result in lower earnings than expected.
“Our second quarter results are in line with our expectations,” said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. “Throughout the key second quarter selling season for 2006-model-year marine products, however, we have experienced significant declines in retail demand, which has resulted in an increase in pipeline inventories.”
Brunswick said it expects to report earnings from continuing operations in the range of $0.93 to $0.94 per diluted share for the second quarter of 2006, in the middle of the company’s previously announced estimate of $0.90 to $0.97. This estimate excludes tax-related benefits expected to be reported in the quarter. In addition, it predicts second quarter sales will be up 1 percent to approximately $1.55 billion. Excluding acquisitions, however, sales are estimated to have declined about 4 percent.
The company said that during the second quarter, it acquired approximately 1.5 million shares of its common stock for approximately $56 million. Over the past year, approximately 5.1 million shares have been repurchased for approximately $193 million.
The company said that 2006 earnings from continuing operations are expected to be in the range of $2.40 to $2.55 per diluted share, compared with its previous estimate of $3.00 and $3.15 per diluted share, in both cases excluding tax-related items. In 2005, the company reported earnings from continuing operations of $3.13 per diluted share, excluding stock sale gains and tax-related items.
“While changing market conditions impact our financial results in the short-term, we have not lost sight of our long-term value creation objectives, and we continue to execute relentlessly against our five key strategies: get the product right; get the distribution right; be best cost in our industries; be global and attract and retain talent,” McCoy continued. “Focusing intently on such fundamentals is better positioning us to benefit when industry conditions improve.”
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