Toro Co. (TTC) recently hit a new 52-week high after reporting better than expected Q1 results on Feb 18.
Company Description
Toro Co. engages in the design and manufacturing of turf maintenance equipment and irrigation systems worldwide. The company was founded in 1914 and has a market cap of $1.49 billion.
First-Quarter Results
Sales for the period were down a bit from last year at $331 million, but earnings came in better than expected at 21 cents, 52% ahead of the Zacks Consensus Estimate. The company has surprised in each of the last four quarters by an average of 12 cents, or 45%.
Toro noted that its results were driven by a strong showing in its residential segment, which was up 9% from last year to $116.8 million. The company also did itself a favor by focusing on operational efficiencies, with SG&A costs down $8 million to 29.2% of sales from 30.7%.
CEO Michael Hoffman commented on the company’s strategy to drive earnings in a tough environment, saying that, “Even with a slight decline in net sales, the leaner cost structure we put in place last year helped improve our profitability.”
Estimates Jump
The solid quarter sent estimates higher, with the current year adding 12 cents to $2.23 and the next year adding 17 cents to $2.66, a solid 19% growth projection.
As it stands, TTC looks reasonably priced, trading with a forward P/E of 20, a slight premium to the overall market with a solid next-year growth projection.
The Chart
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
