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Snap-on Inc (SNA - Analyst Report) reported first quarter 2013 results before the market opened today with earnings per share of $1.40, 4.5% higher than the Zacks Consensus Estimate of $1.34 and 15.7% above the prior-year quarter’s earnings of $1.21.

Despite continued headwinds affecting the company’s business, management’s focus on enhancing van network, building on repair shop owners and managers, extending to critical industries and expanding in emerging markets has paid well.

Total Revenue

Total revenue in the quarter inched up 0.9% year over year to $741.7 million. Organically, sales increased 1.5%. The company reported revenue growth in three of its four operating segments. Revenue growth in the Snap-On Tools, Repairs Systems & Information Group and Financial services was partially offset by lower revenues in the Commercial & Industrial Group.

Segment Results

Commercial & Industrial Group segment sales declined 7% year over year to $266.4 million, due to lower sales to the military and soft European hand tools business as a result of ongoing economic weakness in that region. Organic sales of the segment also declined 6.3% year over year.

Snap-on Tools Group segment sales grew 3.4% year over year to $10.7 million, driven by sales gains across both the company’s U.S. and international franchise operations. Organic sales of the segment grew 3.7%.

Repair Systems & Information sales grew 8.8% to $246.1 million, attributable to higher sales to Original Equipment Manufacturer (OEM) dealerships and gains in sales of diagnostics and repair information products to repair shop owners and managers. Organic sales grew 9.3% year over year.

Financial Services reported operating earnings of $30.5 million on revenues of $44.0 million in the quarter compared with operating earnings of $23.9 million on revenues of $38.0 million a year ago.

Income and Expenses

Operating earnings for the quarter were $138.3 million compared with $121.4 million in the prior-year quarter. Operating expenses were $249.1 million compared with $250.2 million.

Balance Sheet

Cash and cash equivalents were $213.6 million at the end of the quarter with long-term debt of $868.0 million and shareholders’ equity of $1.84 billion compared with $214.5 million, $970.4 million and $1.82 billion, respectively.

Outlook

Concurrent with the earnings release, Snap-On reiterated its outlook for 2013. Snap-On expects to incur capital expenditures of $70 million to $80 million in 2013. The company noted that it will continue to focus on emerging markets, expand its presence in new industries, enhance its mobile tool distribution network and expand in the vehicle repair garage.

Snap-On Incorporated is a global provider of professional tools, equipment, and related solutions for technicians, vehicle service centers, original equipment manufacturers (OEMs), and other industrial users. Products include a broad range of professional hand and power tools; tool storage; vehicle diagnostics and service equipment; business management systems; equipment repair services; and other tool and equipment solutions.

Snap-On currently has a Zacks #3 Rank (Hold). Other players operating in the same industry such as CNH Global NV and Alamo Group Inc. (ALG - Snapshot Report) are good options at the moment with a Zacks Rank #2 (Buy). Another company, Deere & Company (DE - Analyst Report), operating in the same industry, has a Zacks Rank #4 (Sell).

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