Mercury Marine/Brunswick earnings
Marine Engine Segment
The Marine Engine segment, consisting of the Mercury Marine Group and Brunswick New Technologies (BNT), reported net sales of $412.8 million in the first quarter of 2003, an 11 percent increase compared with $370.4 million in the year-ago quarter. The favorable currency effects of a weakened dollar, and the full effect of recent acquisitions, most notably from BNT, largely drove the sales increase for the segment. Excluding these factors, sales were up slightly versus the year-ago quarter. Operating earnings in the quarter declined to $19.3 million versus $24.7 million a year ago. Operating margins were 4.7 percent compared with 6.7 percent in the first quarter of 2002. "More than half of the margin decline was attributed to higher pension, health care and insurance costs," Buckley explained. "Engine segment operating margins also were adversely affected by a shift in mix from classic two-stroke engines to lower-margin four-stroke engines, poor weather during the quarter that led to lower sales of higher-margin parts and accessories, and unabsorbed costs due to production slowdowns to keep inventories at appropriate levels." "While our initial expectations were that marine retail would be relatively flat for the year," Buckley said, "the retail markets have gotten off to a slower-than-anticipated start. This was due to the timing of the war in Iraq and the resulting low consumer confidence coming just as the boating season was beginning. Further, competition in the marine engine segment, has also intensified during the quarter with some manufacturers offering deep discounts," Buckley said. "With the widest array of engines among all manufacturers, nearly 65 years of uninterrupted service to our dealers and customers, and continuing investments in new products and technologies, Mercury is well poised for the future," Buckley said. "We believe initiatives such as Project 'X', our game- changing, high-horsepower four-stroke outboard engine due to arrive in time for next year's boating season, and new integrated marine electronics products will further extend our leadership." Boat Segment The Brunswick Boat Group comprises the Boat segment and includes the Sea Ray, Bayliner, Maxum, Sealine, Hatteras, Boston Whaler, Meridian, Trophy, Baja and Princecraft boat brands. The Boat segment reported net sales for the first quarter of $378.6 million, up 7 percent compared with $353.9 million in the year-ago quarter. Operating earnings for the quarter rose to $14.1 million, up from $3.3 million recorded during the corresponding period last year. Operating margins in the quarter showed good progress, coming in at 3.7 percent versus 0.9 percent for the year-ago period. "The improvement in operating margins is a testament to our Boat Group continuing to do a better job of leveraging top-line growth through operating efficiencies and other improvements," Buckley said. "As for sales, we saw good gains at Sea Ray, which experienced more normal wholesale activity this year compared with the year-ago quarter when pipeline inventories were being adjusted. We are particularly encouraged by the warm acceptance of our many new products and innovations across all 10 of our premier boat brands." "Sales of small boats such as runabouts, deck boats and cruisers have improved, led by the Bayliner 175 that we introduced last year. This boat has helped re-establish Bayliner as the leader in family boating. An entry-level boat, the Bayliner 175 offers an engine and trailer package with a suggested retail price of $9,995," Buckley said. "The market still remains challenging for larger boats." Looking Ahead Buckley noted that the uncertain economy, the situation in the Middle East and SARS continue to cloud the outlook for the remainder of the year. "Though we had overall good results in the first quarter, we must nevertheless remain guarded and vigilant as to how our markets will react to the economic and geopolitical picture," Buckley explained. "Indeed, the war with Iraq, and its subsequent effects on consumers and retail activity, came at a difficult time for the marine industry, which is traditionally the most active in the second quarter. It remains to be seen how markets will react as the war winds down. Given that, we believe our earnings per share for the year will be in the range of $1.40 to $1.50, compared with the $1.14 reported for 2002. This would indicate EPS for the second quarter of 2003 of between $0.50 and $0.55, compared with $0.51 a year ago." Headquartered in Lake Forest, Ill., Brunswick Corporation is a manufacturer and marketer of leading consumer brands including Mercury and Mariner outboard engines; Mercury MerCruiser sterndrives and inboard engines; Teignbridge propellers; MotoTron electronic controls; Northstar marine electronics; IDS dealer management systems; Sea Ray, Bayliner, Maxum, Hatteras, Meridian and Sealine pleasure boats; Baja high-performance boats; Boston Whaler and Trophy offshore fishing boats; Princecraft fishing, deck and pontoon boats; Life Fitness, Hammer Strength and ParaBody fitness equipment; Brunswick bowling centers, equipment and consumer products; and Brunswick billiards tables. |
Can somebody sum this up in about 1 or 2 lines. I dont feel like reading. :p
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Originally posted by TEAMBAJA Can somebody sum this up in about 1 or 2 lines. I dont feel like reading. :p They're making money, and due to the hefty prices they charge for their products, we're the major contributors. |
Brunswick: Sales up 11% for Q1/03, but backing out acquisition and FOREX, sales flat. Margins under pressure.
Using Brunswick as indicator for industry: Overall sales flat. Most interesting segments are top end and bottom end. Margins under pressure. |
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