The Toro Co. reported record earnings for its year ended Oct. 31, driven by fourth-quarter results that exceeded analyst expectations.
A strong performance from the company's golf and irrigation categories helped it earn $30.2 million or 27 cents per share in the fourth quarter, which was above the 21 cents per share expected by analysts.
Earnings per share were up 28.6 percent over the fourth quarter last year, even though sales decreased 2.6 percent to $468.4 million. According to Thomson Reuters, analysts expected the company to report fourth-quarter sales of $477.6 million.
The fourth-quarter results contributed to a record earnings year for the Bloomington-based company. For the year, Toro earned $231 million, or $2.06 per share, compared with $201.6 million, or $1.78 per share, in fiscal 2015.
Sales for the year increased less than 1 percent to $2.4 billion.
"We are pleased to announce record earnings for fiscal 2016, driven by consistent performance and growth in our professional businesses," Richard Olson, Toro's president and chief executive, said in a statement. "New product introductions across the portfolio were favorably received, and we made notable progress in reducing our inventory levels."
For the year, revenue in the professional segment grew 4 percent to $1.71 billion, which offset a 7.8 percent annual sales decline in the company's residential segment.
Strong performance in the landscape contractor, specialty construction and rental business helped offset challenges in the snow and ice management businesses caused by lighter-than-normal snowfall last winter that also affected preseason snow sales.
In the company's earnings call with analysts, Toro said gross margins for the year were helped by favorable commodity prices and increased productivity.
The company's board of directors declared a 16.7 percent increase to its quarterly cash dividend. Toro will pay a dividend of 17.5 cents per share on Jan. 12, to shareholders of record on Dec. 27. For the year, Toro paid $65.9 million in dividends and repurchased approximately $112 million worth of common stock.
The company's earnings guidance for fiscal 2017 was also above analysts' expectations.
The company said it expects net earnings to be in the range of $2.20 to $2.26 per share. Analysts are expecting Toro to earn $2.22 for fiscal 2017. Toro also announced that it expects revenue to grow 3 to 4 percent for the year.
The company's stock closed up 6.17 percent, or $3.36, Thursday to $57.79.
Patrick Kennedy • 612-673-7926
