Analysts’ Corner – Brunswick’s boat sales to balance out?

SAN FRANCISCO, Calif. - Boat retailer MarineMax reported first quarter 2005 results that were well ahead of Wall Street estimates on Thursday, which suggests boat builder Brunswick Corp. will report strong fiberglass boat sales when it releases its fourth quarter 2004 earnings report later this month, according to analyst Gary Cooper of Banc of America Securities LLC.

Cooper also stated that Brunswick's stock should react positively to the MarineMax report. MarineMax accounts for roughly 35 percent of Brunswick's Sea Ray sales, the analyst reported in a statement yesterday.

Strong fiberglass boat sales may be offset by weak aluminum boat sales, though, says Cooper. Data from research firm Statistical Surveys suggests that retail unit sales of Lund, Lowe and Crestliner brands took a hit in the third quarter of 2004. Lowe was down 7.5 percent; Crestliner was down 9.5 percent and Lund was down 16.6 percent, according to the Banc of America Securities report.

MarineMax to take advantage of Brunswick acquisitions?

During MarineMax's earnings conference call yesterday, company executives suggested that the boat retailer is considering the opportunities presented by Brunswick's recent acquisitions in the saltwater market.

Two areas in which MarineMax may expand in the future are the outboard fishing market and the inboard ski market. Brunswick's recent acquisition of the Sea Pro brand would fit into the former category, suggested the boat retailer.

In addition, industry insiders have suggested that Brunswick may be seeking to acquire an inboard ski boat brand as part of its strategy to fill in the “white space” within its Boat Group.

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