A strong fourth quarter for Bloomington-based Toro Co. led to earnings that grew nearly 16 percent for the fiscal year and increased sales by almost 5 percent.
The maker of residential and commercial mowers and snowblowers made $33.8 million, or 31 cents a share, during the fourth quarter, up 12 percent over the same period a year ago and beating analysts’ expectations. Sales were $488.6 million for the quarter ended Oct. 31, up 4.3 percent but not as high as analysts expected, partly because of the timing of snow equipment shipments.
For the year, earnings were up more than 15 percent to $267.7 million, or $2.41 a share, and sales increased 4.7 percent to $2.5 billion.
Chief Executive Rick Olson pointed out that the operating earnings margin of 14.2 percent surpassed an internal goal of 13 percent. The goal was part of an overall strategy called Destination Prime, which also “regained momentum in sales growth and working capital improvement,” he said.
The company is not sitting on its laurels. It now has a new set of three-year goals called Vision 2020, which include organic sales growth of 5 percent each year and operating margins of 15.5 percent.
“We believe our Vision 2020 goals support our key corporate priorities of accelerating profitable growth, driving productivity and operational excellence and empowering our greatest asset — our people,” Olson said.
Olson also set official company guidance for fiscal 2018 of 4 percent revenue growth and net earnings in the range of $2.57 to $2.63 a share.
Sales growth for the quarter and year were driven by the company’s professional segment, which includes golf courses, sports fields and ground equipment businesses. Sales in the segment were $1.81 billion for the year, up 6.2 percent. Toro and Exmark branded landscape contractor equipment and BOSS professional snow and ice management products all contributed to growth.
Sales in the residential segment for the year were nearly flat at $673.2 million. Some residential segment sales were lost as homeowners opted to upgrade to newer professional-level rider mowers.
Shares of the Toro Co. closed Thursday at $65.50, up 2.3 percent on the day and 16.5 percent year-to-date.