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LAKE FOREST, Ill. — For the first quarter of 2011, Brunswick Corporation reported net sales of $985.9 million, up from $844.4 million a year earlier. For the quarter, the company reported operating earnings of $67.0 million, up significantly from operating earnings of $10.1 million in the first quarter of 2010.
Net earnings in the first quarter were $27.5 million compared with a net loss of $13.0 million last year.
“Our first quarter results reflected higher marine wholesale shipments compared to the prior year, together with outstanding operating leverage achieved by our operating businesses,” Dustan E. McCoy said in a statement. “Shipments into our dealer pipeline continue to be consistent with our strategy to closely match wholesale and retail demand units on an annual basis. The higher quarterly wholesale shipments reflect our plan that retail demand in 2011 will be stable, compared to the declining market in 2010, as well as our plan to ensure that our dealers have the appropriate levels of inventory to meet early season demand. Our Marine Engine segment performed well across its entire product offering, including its parts and accessories business.”
The Marine Engine segment, consisting of the Mercury Marine Group, including the marine parts and accessories businesses, reported net sales of $520.5 million in the first quarter of 2011, up 17 percent from $445.7 million in the first quarter of 2010. International sales, which represented 43 percent of total segment sales in the quarter, increased by 6 percent. For the quarter, the Marine Engine segment reported operating earnings of $51.6 million, including restructuring charges of $4.3 million. This compares with operating earnings of $26.5 million in the first quarter of 2010, which included $2.4 million of restructuring charges.
Sales were higher across all of the segment’s main operations. The segment’s global sterndrive engine product category experienced the greatest percentage sales growth.
Mercury’s manufacturing facilities continued to increase production during the quarter in response to customer requirements. Higher sales, the combined effect of cost reductions, increased fixed-cost absorption and improved operating efficiencies, as well as a gain on the sale of a distribution facility all had a positive effect on operating earnings during the quarter, according to the company.
The Boat segment, which includes 16 boat brands, reported net sales of $283.6 million for the first quarter of 2011, an increase of 16 percent compared with $243.6 million in the first quarter of 2010. International sales, which represented 37 percent of total segment sales in the quarter, increased by 18 percent during the period. For the first quarter of 2011, the Boat segment reported an operating loss of $3.8 million, including restructuring, exit and impairment charges of $1.0 million. This compares with an operating loss of $26.7 million, including restructuring charges of $4.1 million, in the first quarter of 2010.
Boat segment production and wholesale shipments increased during the quarter, compared with the first quarter of 2010, in response to the seasonal inventory requirements of dealers, who are not anticipating the annual declines in the retail market that were experienced in 2010. The increase in wholesale unit shipments was partially offset by the effect of a higher mix of smaller boat sales. Higher sales, increased fixed-cost absorption, fixed-cost reductions and lower restructuring, exit and impairment charges had a positive effect on the segment’s improved quarterly results.
“The retail marine market for 2011 is unfolding as expected for the year,” McCoy said. “We continue to believe that the significant decline in overall industry marine retail demand bottomed in 2010. However, with the majority of the selling season still ahead of us, we are not yet able to determine if our 2011 retail demand will match our plan for a flat market.”
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