Graco reported first-quarter sales and profits that missed Wall Street expectations amid continued currency woes, the continued slump in orders from oil producers plus higher pension, stock and tax expenses, officials said Wednesday.
Upbeat sales in Asia and Europe were not enough to shake off the quarter's sales declines in the Americas. While industrial product sales surged during the quarter, sales to contractors and oil and gas producers fell behind.
Overall, the Minneapolis-based manufacturer of industrial sprayers and pumps saw total quarterly sales fall 1 percent to $304.9 million. Profits fell 43 percent to $39.6 million, or 70 cents per share. Results were hurt, among other reasons, by corporate expenses that were not previously allocated.
On average, analysts had expected adjusted earnings of 76 cents a share and revenue of $309.3 million. Graco reported results after the market closed. The stock fell nearly 4 percent in aftermarket trading to $82.23 per share.
"First-quarter sales continued to show variability between regions and product lines, similar with the quarter-to-quarter variability we have experienced during the last couple of years," said CEO Patrick McHale in a statement.
"February was notably weak, particularly in the Americas," where double-digit declines hurt incoming order rates across most product categories, McHale said. "Order rates normalized in March and have continued to hold through the beginning of the second quarter."
Sales of contractor equipment proved weaker than expected during the first quarter as it faced a tough comparable for the same quarter of 2015. However, McHale said he expects the Americas contractor line to make up ground in the second quarter.
Dee DePass • 612-673-7725
