Minneapolis – St. Paul – August 19 --Renewed demand from golf courses and landscape businesses sparked robust third-quarter sales and earnings gains at Toro Co. that left Wall Street estimates in the dust. The Bloomington-based maker of outdoor maintenance equipment also raised its estimates for the year by more than 12 percent.
Toro reported Thursday a 16 percent increase in revenue to $458.9 million for the quarter ended July 30. Earnings rose almost 70 percent to $33.4 million, or $1.01 a share. Analysts had estimated earnings per share of 78 cents on revenue of $429.9 million.
The company boosted its earnings forecast for fiscal 2010 from $2.40 a share to $2.70 a share. That would compare with $1.73 a share for 2009.
The stock traded as high as $55 a share Thursday before closing at $51.65 a share, up just 12 cents on unusually high volume of about 655,400 shares.
In a research note, James Lucas, an analyst at Janney Capital Markets, said, "While Toro has done the right things internally, and the top line has rebounded, we believe the shares are fairly valued." He said he is keeping his neutral rating on the stock and his 12-month target price of $54 a share.
In a conference call with analysts, CEO Michael Hoffman said, "We remain mindful of the sluggish nature of the recovery." Even so, he noted, Toro is seeing increased sales from pent-up demand in the professional segment, while new products are a key driver in the residential business unit.
The professional segment, which accounts for about 70 percent of total sales, had double-digit sales gains in all product categories during the quarter. Sales growth in the residential products segment was more modest at close to 8 percent.
One performance benchmark at Toro is to have at least 35 percent of overall sales come from products introduced in the current year and previous two years. Hoffman said the company is exceeding that goal, with nearly 50 percent of sales coming from newer products.
No comments:
Post a Comment