Heavy snow helped sales in the first quarter, but come spring, earnings are expected to be slightly below analysts’ expectations.
The multiple and hefty snowfalls across much of the nation this winter whipped up snowblower sales for Toro Co. and helped it zoom past investor expectations in its fiscal first quarter.
The Bloomington-based maker of outdoor equipment on Thursday said that revenue even surpassed the unusually strong performance of a year ago when diesel equipment sales spiked ahead of new federal emissions laws.
“Weather was a [tail] wind. The wintry mix helped boost sales for the quarter,” Toro CEO Mike Hoffman said in a conference call. There was a “nonstop series of storms and it even seems we are going to get another 6 to 12 inches of snow here in Minnesota today,” he added.
Toro earned $25.9 million, or 44 cents a share, during the three months ended Jan. 31. That was 7 cents higher than analysts forecast.
A year ago, Toro earned $31.4 million, or 53 cents a share, when it was helped by a one-time tax gain.
Revenue in the latest period was $446 million, up 0.3 percent from last year and $34 million above analysts’ expectations.
Toro executives said they expect 2014 revenue to rise 5 to 6 percent and for earnings to hit $2.90 to $2.95 a share.
Their previous guidance called for a 4 to 5 percent sales increase and for earnings of $2.85 to $2.90 a share.
The executives anticipate strong golf product sales driven by new-product introductions for golf course managers and the expectation of an earlier spring than last year, when snowstorms plagued the Midwest into May.
Hoffman also expects Toro’s grass and crop irrigation sales to continue growing as global water conservation efforts march onward. Toro’s newly acquired line of trenching and tunneling machinery also is expected to do well as construction season approaches, he said.
Raymond Ames equity research analyst Sam Darkatsh noted that Toro beat its own first-quarter estimate by 9 cents a share, “but you only raised the [annual] guidance by 5 cents.” He asked if that meant Toro could expect to see a weaker second half of the year.
Toro executives said that was not the case.
For their fiscal second quarter, Toro officials said they now expect earnings of $1.45 to $1.50 a share. That’s up from the $1.32 per share reported a year ago, but four cents less than analysts were anticipating.
Toro’s stock price fell 53 cents, or 0.8 percent, to $65.40.