Briggs & Stratton Corporation (BGG) reported fiscal second quarter earnings of 6 cents per share, which is in-line with the Zacks Consensus Estimate. Quarterly earnings were flat compared to last year as a decline in revenue was offset by lower manufacturing costs and lower engineering, selling, general and administrative costs.
The company reported net sales of $393.0 million for the second quarter of fiscal 2010, which was 17.7% lower than last year’s sales of $477.5 million. The year-over-year decline in sales was attributed to lower volumes in both segments.
The Engines segment posted net sales of $274.3 million, down 19.2% compared to $339.3 million in the second quarter of fiscal 2009. Engine unit shipments were down 15% compared to last year due to lower shipments of lawn and garden equipment, as some OEMs are delaying deliveries of engines to control their inventory. Also, the company saw weak demand for engines for portable generators due to the lack of any major weather events this year.
The segment reported an operating income of $18.0 million, compared to $22.0 million in the second quarter of fiscal 2009. Lower operating and manufacturing costs were more than offset by lower revenue.
Net sales in the Power Products segment fell 18.4% year-over year to $156.6 million in the second quarter of fiscal 2010, reflecting lower sales of portable generators due to the lack of any major weather events. Also, all lawn and garden product volumes were lower compared to last year.
The Power Products segment reported an operating loss of $4.5 million for the quarter. However, this was an improvement compared to an operating loss of $8.6 million reported in the second quarter of last fiscal year. The improved performance was a result of lower manufacturing costs, related to lower commodity costs and planned cost saving initiatives.
Briggs & Stratton reiterated its fiscal 2010 earning guidance in the range of $40 to $50 million or $0.80 to $1.01 per share. The company forecasts a 6% year-over-year decline in sales for fiscal 2010 due to the absence of hurricane related sales of portable generators, selected price reductions to reflect projected lower commodity costs and lower engine shipments to Europe for lawn and garden applications. The company projects operating income margins in the range of 4.0% to 5.0% for the year.
Read the full analyst report on “BGG”
Zacks Investment Research
