Analyst questions Brunswick’s strategy
SAN FRANCISCO, Calif. – The day after Brunswick Corp. lowered its earnings per share guidance for fiscal 2005, citing the potential for a decline in dealer orders, Bank of America analyst Gary Cooper questioned whether the boating industry giant’s acquisition strategy is working.
In a statement Wednesday, Cooper suggested that Brunswick’s newly acquired boat brands were experiencing poor sales, possibly due to low consumer acceptance of Brunswick’s new Mercury engines.
“We believe BC’s strategy of acquiring boat companies to expand product offerings and increase engine penetration may be at risk if sales decline following engine substitution,” he wrote.
As a result, Bank of America has lowered its EPS estimate for the year from $3.42 to $3.29, though it remains Neutral on Brunswick Corp.
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