Toro Co. CEO Richard Olson said the company's fiscal 2018 is off to a good start, once again recording record revenue in the first quarter.
Revenue grew 6.3 percent to $548.2 million in the quarter ended Feb. 2.
Net income was $22.6 million, or 21 cents a share, down from $45 million, or 41 cents a share, in the same period a year ago. However, once one-time impacts from the federal tax reform and other charges were taken into account, adjusted earnings were $52.1 million, or 48 cents a share, beating Wall Street expectations.
"We continue to build momentum in the professional segment driven by increased demand for product offerings across the portfolio worldwide," Olson said in a statement.
Toro's professional segment is the Bloomington company's largest and showed the most improvement in the quarter. Sales were up 8.6 percent to $403.7 million, helped by strong sales of golf and landscape equipment.
Results for the professional segment were offset some by a poor snow season that impacted the sales of its Boss professional snow and ice management equipment and also residential snow products. Late season snowstorms, though, helped reduce inventory.
In the residential segment, overall sales were up 1.5 percent to $142.5 million.
The quarter included charges of $20.5 million for the re-measurment of deferred tax assets and liabilities, and a $12.6 million provisional calculation for the repatriation tax. Company officials believe the one-time costs will be offset by the lower overall tax rates and prove beneficial in the future.
Olson told analysts on the company's earnings call that as a result of the corporate tax cut Toro will invest more in research and development and strategic acquisitions for profitable growth; work to improve business processes and cut costs by investing in lean information technologies and automation; and do more employee development.
The first quarter is generally Toro's smallest, but it heads into its most important selling seasons. Officials said they received positive receptions to new products introduced at preseason trade shows including a new multipurpose vehicle, the Outcross 9060. The cross between an agricultural tractor and a utility vehicle is meant to provide flexibility for turf professionals who work on golf courses, sports fields and large properties.
"As we head into our key selling season, we are prepared to address customer demand by executing consistently and efficiently," Olson said.
Shares of Toro were up 1 percent to $62.38 for the day. Shares are down 3.7 percent year-to-date and in the last 52 weeks shares have traded in the range of $58.39 to $73.86.