Minneapolis-based pump and sprayer maker Graco beat profit expectations and posted solid third-quarter results after the close of business Wednesday.
Earnings for the quarter ended Sept. 23 jumped 7 percent to $54.4 million, or 95 cents a share.
Analysts on average had expected profits of 89 cents per share.
The quarter's sales rose 3 percent to $327 million amid strong product demand from contractors in North America and Europe.
The uptick from contractors helped offset weak demand for Graco's industrial equipment division and from oil and gas processing customers. As a result, total sales for the quarter were about $5 million shy of analysts' expectations.
"While macroeconomic conditions worldwide are tepid, we remain committed to our long-term strategies to drive growth and sustainable shareholder value," said Chief Executive Patrick McHale in a statement. "Solid performance by our contractor segment was again the primary driver for Graco's growth in the third quarter."
Graco reiterated its prior forecast for the full 2016 year. The percentage increase in sales is still expected to grow in the low single digits, McHale said.
He noted that full-year results will be somewhat constrained because of ongoing weakness in the industrial sector, particularly in the Americas. Construction sales are expected to be strong all year. Graco's "process division," however, remains cautious about 2016 due to "ongoing headwinds" in the oil-and-gas sector. The process division saw sales for the past 12 months decline 20 percent.
Officials also cautioned that Graco's full-year results will offer a tough comparison to 2015. Last year is when Graco enjoyed a large profit from the mandated sale of the Illinois Tool Works paint finishing business Graco had acquired in 2012.
In April 2015, Graco sold the liquid finishing businesses to the Carlisle Co. and realized $141 million in after-tax investment income from the deal.
Dee DePass • 612-673-7725
