Brunswick Corp. reported its marine industry revenue results Thursday for the third quarter of 2017. Net sales for the marine segment increased by 7 percent. Earnings for the company’s boat segment declined, reported Brunswick Chairman and Chief Executive Officer Mark Schwabero.
"We faced certain headwinds in the quarter which led to a decline in boat earnings," Schwabero said. Brunswick significantly lowered production in the company’s large fiberglass sterndrive boat category and reduced order pipelines from second quarter levels in response to weak retail demand.
During September, Hurricane Irma disrupted the Brunswick’s Florida-based manufacturing operations, Schwabero said.
Third quarter revenues increased by 4.4 percent, reflecting strong growth in the outboard engine and aluminum outboard boat businesses, along with solid growth in the company’s parts and accessories businesses, Schwabero said.
Overall demand in international marine markets remained strong, led by gains in Europe, Canada and Asia-Pacific, as well as improving conditions in other regions, he said.
Marine market data indicates a healthy global marketplace, which is consistent with our assumptions entering the year, Schwabero said.
The marine engine segment reported net sales of $669.2 million in the third quarter of 2017, up 7 percent from $625.7 million in the third quarter of 2016.
International engine sales, which represented 30 percent of total segment sales in the quarter, were up 14 percent compared to the prior year period.
For the quarter, the marine engine segment reported operating earnings of $115.2 million. This compares with operating earnings of $109.5 million in the third quarter of 2016.
Sales increases in the quarter were led by the outboard engine business as well as solid growth from the parts and accessories businesses.
The increase in operating earnings in the third quarter was primarily the result of higher net sales, improved cost efficiencies and favorable impacts from changes in foreign exchange rates, which were partially offset by the unfavorable impact from planned increases in growth investments in advance of new product introductions.
Brunswick’s boat segment reported net sales of $309.3 million for the third quarter of 2017, a slight increase from $307.0 million in the third quarter of 2016.
International sales, which represented 22 percent of total segment sales in the quarter, increased by 8 percent compared to the prior year period.
For the third quarter of 2017, the boat segment reported operating earnings of $0.1 million. This compares with operating earnings of $6.8 million in the third quarter of 2016.
The boat segment's revenue reflected strong growth in the aluminum outboard boat business, particularly in pontoon boats, Schwabero said.
The decrease in operating earnings resulted mostly from an unfavorable change in sales mix for the segment, resulting from factors impacting sales comparisons, as well as manufacturing inefficiencies, including costs associated with Hurricane Irma.
“Our marine engine segment continues to perform as anticipated, and we expect our collective marine businesses to continue to generate solid top-line growth over the remainder of the year,” Schwabero said
Brunswick will host its third quarter earnings conference call today at 10 a.m. CDT. William Metzger, senior vice president and chief financial officer, and Ryan Gwillim, vice president - investor relations, will join Schwabero on the call.