Brunswick’s operating results strengthen

By Ashesha Mehrotra

Brunswick Corp.’s fourth quarter results reflected strengthening underlying profits, masked by negative non-operating factors.

In the latest quarter,, the Lake Forest, Ill. based company reported a net loss of $9.3 million, or 10 cents per share, versus a deficit of $4.3 million, or 5 cents a share, in the year-ago period.

Revenues climbed 4.9 percent to $986.1 million from $938.6 million reported last year in the same quarter.

Brunswick’s results were distorted by a number of factors, including a hefty tax benefit income and pension settlement charges. Excluding one-time factors in both quarters, however, the maker of recreational products said that adjusted earnings from current operations were 52 cents a share, up from 33 cents a year ago. That topped the Zack’s analysts consensus of 45 cents by 7 percent.

The “outstanding” 2015 results “represent the sixth consecutive year of strong improvements in operating performance,” Brunswick chairman and chief executive officer Dustan E. McCoy told analysts in the earnings call.

The company reported that sales and operating profit rose at its marine-engine group and its boat segment. For its fitness-segment group, profits inched slightly lower, in part because of unfavorable currency-translation linked to the dollar’s strength.

Brunswick Jan 2015-Jan 2016 Stock Prices

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Brunswick’s stock price has decreased in the last year. (Ashesha Mehrotra/MEDILL)

Tim Conder, analyst at Wells Fargo & Company said that the company’s latest report shows a continuing rise in its market share and better-than-expected profit margins in the engine group, despite the fitness-segment lower profit margins due to high foreign currency exposure.

For the full year, the company reported that sales were $4.10 billion, an increase of 4.6 percent from $3.83 billion last year. Earnings, however, were down by 1.75 percent to $241.4 million, or $2.56 a share, from $245.7 million, or $2.58 a share in the same period last year.

“Our guidance for 2016 reflects a diluted EPS, as adjusted, range of $3.35 to $3.50. Finally, for the full year, we expect to generate strong free cash flow in excess of $200 million,” said Brunswick president and chief operating officer Mark D. Schwabero in the earnings call.

In New York Stock Exchange trading Thursday, Brunswick shares dropped by $2.21, or 5.21 percent, to close at $39.95.

Photo at Top: Brunswick Q4 earnings report shows mixed results. (Brunswick Corp.)