We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Briggs & Stratton (BGG) Misses on Q4 Earnings & Revenues
Read MoreHide Full Article
Briggs & Stratton Corporation reported fourth-quarter fiscal 2016 (ended Jul 3, 2016) adjusted earnings of 46 cents per share, down 9.8% from 51 cents earned in the prior-year quarter. Results also missed the Zacks Consensus Estimate of 52 cents per share.
On a reported basis, Briggs & Stratton posted earnings per share of 12 cents for the quarter, decreasing significantly from 45 cents per share in the prior-year quarter.
Operational Updates
Briggs & Stratton reported revenues of $502 million in the fourth quarter, which is a decline of 6.8% year over year, mainly due to cooler than normal temperatures in North America and Europe. Industry shipments in April and May were down significantly when compared to last year, as the cooler weather adversely impacted retail sales through the quarter. Revenues also fell short of the Zacks Consensus Estimate of $559.6 million.
Cost of sales went down 5.7% year over year to $405.8 million. Adjusted gross profit decreased 0.9% to $107.6million from $108.6 million in the prior-year quarter. Adjusted gross margin expanded 120 basis points (bps) year over year to 21.4%.
Engineering, selling, general and administrative expensesrose 16.9% year over year to $85.5 million. Adjusted net income in the reported quarter was $20.1 million compared with $23 million in the year-ago quarter.
Segmental Performance
Engines Segment: Net sales in this segment decreased 10.5% year over year to $315 million. Cool spring weather in North America and Europe, combined with global economic uncertainty, led to lower demand for residential walk and riding mowers. Adjusted segment income for the quarter decreased 15.4% to $28.7 million from $33.9 million in the year-ago quarter.
Product Segment: The segment reported sales of $216.3 million, rising 1.9% from the year-ago quarter driven by increased shipments of high-end residential and commercial lawn and garden equipment through its North American dealer channel; and, the results of Billy Goat, which was acquired in May 2015. The segment reported adjusted income of $2.8 million, versus $2.2 million in the year-ago quarter.
Fiscal 2016 Performance
Briggs & Stratton posted adjusted earnings of $1.25 per share for fiscal 2016, which had decreased 12% from $1.42 a share in fiscal 2015. Earnings missed the Zacks Consensus Estimate of $1.32 per share. Including special items, earnings were 60 cents per share for the year, compared with $1.00 a year ago.
Revenues for the full year decreased 4.5% year over year to $1.81 billion from $1.89 billion in fiscal 2015, and fell short of the Zacks Consensus Estimate of $1.93 billion. Year-over-year decrease in net sales was due to a $25 million reduction in job site products sales and complemented by lower sales caused by cool spring weather in North America and Europe as well as economic uncertainty in many international markets, including Europe.
Financials
Briggs & Stratton generated cash and cash equivalents of $89.8 million in fiscal 2016 compared with the $118.4 million in fiscal 2015. The company generated cash flow from operations of $111.8 million in fiscal 2016 compared with $148 million in fiscal 2015.
During fiscal 2016, Briggs & Stratton repurchased around $37.4 million in shares under the share repurchase program, and paid $23.6 million in dividends. The company announced a quarterly dividend increase of 4% to 14 cents per share.
For fiscal 2017, Briggs & Stratton expects net income to be in the range of $55–$62 million. The company provided earnings per share outlook of $1.26–$1.41 for the full year, which excluded the effects of share repurchases.
The company projects net sales for fiscal 2016 to be in the band of $1.84–$1.89 billion which assimilates Briggs & Stratton’s expectation that the U.S. residential lawn and garden market improves by 1% to 4%, including expected improvements in the housing market and agreeable seasonal spring weather in key markets.
The company also expects that international regions will exhibit less growth than the U.S. in light of economic uncertainty. Sales of job site products are expected to modestly improve as channel inventories gradually deplete.
Operating margins are expected to be approximately 5.4% to 5.7%. Compared to last year, operating margins are expected to improve due to product margin expansion, manufacturing cost reductions and higher equity in earnings of unconsolidated affiliates.The improvement will be tempered by incremental in pre-tax expenses for its ERP upgrade and commercial mowing capacity expansion projects. Capital expenditures are projected to be approximately $70 million to $75 million.
Currently, Briggs & Stratton has a Zacks Rank #4 (Sell).
Some better ranked stocks in the same sector are ACCO Brands Corp. (ACCO - Free Report) , AO Smith Corp. (AOS - Free Report) and Apogee Enterprises, Inc. (APOG - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Briggs & Stratton (BGG) Misses on Q4 Earnings & Revenues
Briggs & Stratton Corporation reported fourth-quarter fiscal 2016 (ended Jul 3, 2016) adjusted earnings of 46 cents per share, down 9.8% from 51 cents earned in the prior-year quarter. Results also missed the Zacks Consensus Estimate of 52 cents per share.
On a reported basis, Briggs & Stratton posted earnings per share of 12 cents for the quarter, decreasing significantly from 45 cents per share in the prior-year quarter.
Operational Updates
Briggs & Stratton reported revenues of $502 million in the fourth quarter, which is a decline of 6.8% year over year, mainly due to cooler than normal temperatures in North America and Europe. Industry shipments in April and May were down significantly when compared to last year, as the cooler weather adversely impacted retail sales through the quarter. Revenues also fell short of the Zacks Consensus Estimate of $559.6 million.
Cost of sales went down 5.7% year over year to $405.8 million. Adjusted gross profit decreased 0.9% to $107.6million from $108.6 million in the prior-year quarter. Adjusted gross margin expanded 120 basis points (bps) year over year to 21.4%.
Engineering, selling, general and administrative expensesrose 16.9% year over year to $85.5 million. Adjusted net income in the reported quarter was $20.1 million compared with $23 million in the year-ago quarter.
Segmental Performance
Engines Segment: Net sales in this segment decreased 10.5% year over year to $315 million. Cool spring weather in North America and Europe, combined with global economic uncertainty, led to lower demand for residential walk and riding mowers. Adjusted segment income for the quarter decreased 15.4% to $28.7 million from $33.9 million in the year-ago quarter.
Product Segment: The segment reported sales of $216.3 million, rising 1.9% from the year-ago quarter driven by increased shipments of high-end residential and commercial lawn and garden equipment through its North American dealer channel; and, the results of Billy Goat, which was acquired in May 2015. The segment reported adjusted income of $2.8 million, versus $2.2 million in the year-ago quarter.
Fiscal 2016 Performance
Briggs & Stratton posted adjusted earnings of $1.25 per share for fiscal 2016, which had decreased 12% from $1.42 a share in fiscal 2015. Earnings missed the Zacks Consensus Estimate of $1.32 per share. Including special items, earnings were 60 cents per share for the year, compared with $1.00 a year ago.
Revenues for the full year decreased 4.5% year over year to $1.81 billion from $1.89 billion in fiscal 2015, and fell short of the Zacks Consensus Estimate of $1.93 billion. Year-over-year decrease in net sales was due to a $25 million reduction in job site products sales and complemented by lower sales caused by cool spring weather in North America and Europe as well as economic uncertainty in many international markets, including Europe.
Financials
Briggs & Stratton generated cash and cash equivalents of $89.8 million in fiscal 2016 compared with the $118.4 million in fiscal 2015. The company generated cash flow from operations of $111.8 million in fiscal 2016 compared with $148 million in fiscal 2015.
During fiscal 2016, Briggs & Stratton repurchased around $37.4 million in shares under the share repurchase program, and paid $23.6 million in dividends. The company announced a quarterly dividend increase of 4% to 14 cents per share.
BRIGGS & STRATT Price, Consensus and EPS Surprise
BRIGGS & STRATT Price, Consensus and EPS Surprise | BRIGGS & STRATT Quote
Fiscal 2017 Outlook
For fiscal 2017, Briggs & Stratton expects net income to be in the range of $55–$62 million. The company provided earnings per share outlook of $1.26–$1.41 for the full year, which excluded the effects of share repurchases.
The company projects net sales for fiscal 2016 to be in the band of $1.84–$1.89 billion which assimilates Briggs & Stratton’s expectation that the U.S. residential lawn and garden market improves by 1% to 4%, including expected improvements in the housing market and agreeable seasonal spring weather in key markets.
The company also expects that international regions will exhibit less growth than the U.S. in light of economic uncertainty. Sales of job site products are expected to modestly improve as channel inventories gradually deplete.
Operating margins are expected to be approximately 5.4% to 5.7%. Compared to last year, operating margins are expected to improve due to product margin expansion, manufacturing cost reductions and higher equity in earnings of unconsolidated affiliates.The improvement will be tempered by incremental in pre-tax expenses for its ERP upgrade and commercial mowing capacity expansion projects. Capital expenditures are projected to be approximately $70 million to $75 million.
Currently, Briggs & Stratton has a Zacks Rank #4 (Sell).
Some better ranked stocks in the same sector are ACCO Brands Corp. (ACCO - Free Report) , AO Smith Corp. (AOS - Free Report) and Apogee Enterprises, Inc. (APOG - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>