Brunswick Corporation expects to report earnings from continuing operations in the range of 93 cents to 94 cents per diluted share for the second quarter of 2006, in the middle of the company’s previously announced estimate of 90 cents to 97 cents. This estimate excludes tax-related benefits expected to be reported in the quarter.
Brunswick will release its second quarter 2006 financial results before the markets open on Thursday, July 27. The company said it expects to report sales up 1 percent to approximately $1.55 billion. Excluding acquisitions, however, sales are estimated to have declined about 4 percent.
The company said that during the second quarter, it acquired approximately 1.5 million shares of its common stock for approximately $56 million. Over the past year, approximately 5.1 million shares have been repurchased for approximately $193 million.
“Our second quarter results are in line with our expectations,” said Brunswick Chairman and Chief Executive Officer Dustan E. McCoy. “Throughout the key second quarter selling season for 2006-model-year marine products, however, we have experienced significant declines in retail demand, which has resulted in an increase in pipeline inventories. As we now enter the off- season, we cant rely solely on retail demand to rebalance the pipeline. So, we will be reducing further our production levels, leading to a lowering of our earnings estimate for the second half of the year. This is primarily due to reduced sales and the impact of fixed cost absorption from production cuts needed to adjust pipeline inventories. Although this will result in reduced margins, we believe that managing pipeline inventories is critical in a cyclical, as well as a seasonal, industry.”
The company said that 2006 earnings from continuing operations are expected to be in the range of $2.40 to $2.55 per diluted share, compared with its previous estimate of $3.00 and $3.15 per diluted share, in both cases excluding tax-related items. In 2005, the company reported earnings from continuing operations of $3.13 per diluted share, excluding stock sale gains and tax-related items.
“While changing market conditions impact our financial results in the short-term, we have not lost sight of our long-term value creation objectives, and we continue to execute relentlessly against our five key strategies: get the product right; get the distribution right; be best cost in our industries; be global and attract and retain talent,” McCoy continued. “Focusing intently on such fundamentals is better positioning us to benefit when industry conditions improve.”
