Brunswick Corp.’s latest earnings motor past estimates

Brunswick Corp. Sales Chart

By Melissa “Missy” Enaje

Brunswick Corp. shares moved higher Thursday after the boat and sporting-goods maker, helped by stronger sales in all three of its major segments, turned in third quarter earnings that exceeded Wall Street estimates.

In the latest quarter, the Lake Forest, Ill.-based company had net earnings of $104.4 million, or $1.10 per diluted share, up from $57.8 million, or $0.61 per diluted share, in the year-ago period. But Brunswick’s latest quarter was artificially inflated by the profit from sale of its retail bowling business. Excluding one-time factors, adjusted earnings were 63 cents per diluted share, up from 58 cents in last year’s quarter.

The latest quarter’s adjusted per-share earnings easily topped the 58 cents analysts surveyed by Yahoo Inc. had been expecting.

Brunswick’s revenues climbed 13 percent to $932.1 million from $824.4 million a year ago. In the recreational marine products sector, Brunswick’s brands include Mercury and Mariner outboard engines, Sea Ray and Uttern boats, Attwood and Whale marine parts and accessories as well as commercial fitness equipment brands Life Fitness and Hammer Strength.

“As I look at 2015, I see continued revenue growth in the range of five to seven percent,” Dustan McCoy, Brunswick chairman and chief executive officer told analysts in an earnings call.

In New York Stock Exchange trading, Brunswick Corporation (BC) shares rose $3.51, or 6.1 percent, to close at $60.63.

While the latest quarter results were solid, McCoy said, they also reflected the lack of new product flow. Brunswick, the CEO added, is “going to see the benefit” of new-products development in the future.

Despite currency fluctuations and unfavorable weather in some markets, all three of Brunswick’s retail segments- marine engine, boat and fitness – reported higher sales.

In the marine engine segment, sales were led by outboard parts and accessories, with a decline in sterndrive engines. For the boat segment, sales in the third quarter were led by international sales. The company’s fitness segment saw increased sales due to growth in U.S. health clubs, hospitality, local and federal government customers.

“The stand-out highlights in the quarter were the functions and growth in the marine assets,” said Jimmy Baker, an analyst at B. Riley Caris firm. He added that while the industry is performing “okay,” Brunswick’s “compelling products” are building an “enormous backlog for the front half of 2015.” Baker highlighted Brunswick’s luxury-boat brand, Sea Ray, as recapturing market share and their fishing-boat brand, Boston Whaler, as continuing to gain share.

“I think we’ll end the year with wholesale and retail in line,” McCoy said in the call. “We got a bunch of boats that were sold out into next year.” If “pent-up” demand develops as expected, he said, they’ll “make decisions about when to make more.”