Brunswick Corp. reported a 10 percent increase in net sales for the third quarter, with strength across all segments.
Sales were up 13 percent for the company’s boat segment. The engine segment posted a 6 percent gain with growth in parts and accessories and outboards offsetting declines in sterndrive sales.
The U.S. marine market — with 93 percent of the season completed — has been strong this year, Brunswick Chairman and CEO Mark Schwabero said during a call discussing the earnings Thursday.
Brunswick is “outpacing the market growth rates in U.S. and Europe,” he said. “Canada continues to show weakness and dealers are managing inventories very conservatively.”
Demand remains strong in Asia Pacific, Schwabero said, but Latin America, Africa and Middle East remain difficult markets.
For the third quarter of 2016, the company reported net sales of $1,093.0 million, up from $991.9 million a year earlier. For the quarter, the company reported operating earnings of $122.5 million, which included $2.4 million of restructuring and integration charges related to recent fitness acquisitions. This compares with operating earnings of $115.8 million in the third quarter of 2015. For the third quarter of 2016, Brunswick reported net earnings of $85.3 million, or $0.93 per diluted share, compared with net earnings of $72.2 million, or $0.77 per diluted share, for the third quarter of 2015.
“Our reported third quarter net sales increased by 10 percent,” said Brunswick chairman and CEO Mark Schwabero. “Our top line reflected the benefits of our acquisition strategy, particularly in our Fitness segment, and strong growth rates in all three of our primary boat categories, as well as marine parts and accessories. This growth included another solid performance in outboard engines.
“The U.S. marine market continues to exhibit solid fundamentals and growth, which are supported by stable boating participation, favorable replacement cycle dynamics and innovative products being introduced throughout the marketplace. Overall, international marine markets have been challenging, including weak demand in certain markets such as Latin America, the Middle East and Africa and Canada. Our product successes in both our engine and boat segments have enabled continued market share gains and mix benefits.”
The Marine Engine segment, consisting of the Mercury Marine Group, which includes the marine parts and accessories businesses, reported net sales of $625.7 million in the third quarter of 2016, up 6 percent from $588.2 million in the third quarter of 2015.
International sales, which represented 31 percent of total segment sales in the quarter, were up 1 percent compared to the prior year period. On a constant currency basis, international sales were consistent with the prior year. For the quarter, the Marine Engine segment reported operating earnings of $109.5 million. This compares with operating earnings of $102.5 million in the third quarter of 2015.
Sales increases in the quarter were led by Mercury’s parts and accessories businesses and the outboard engine business, partially offset by declines in the sterndrive engine business. Higher revenues and cost reductions contributed to the increase in operating earnings in the third quarter of 2016. Partially offsetting these positive factors were the unfavorable impacts from foreign exchange and planned increases in growth investments.
The boat segment reported net sales of $307.0 million for the third quarter of 2016, an increase of 13 percent compared with $271.3 million in the third quarter of 2015. International sales, which represented 21 percent of total segment sales in the quarter, increased by 11 percent compared to the prior year period. On a constant currency basis, international sales were up 10 percent. For the third quarter of 2016, the boat segment reported operating earnings of $6.8 million. This compares with operating earnings of $6.4 million in the third quarter of 2015.
See the full earnings report here.