The long-awaited divestiture of Graco Inc.'s liquid finishing business put a hefty $110 million gain into Graco's pocket during the second quarter, officials said Wednesday.
The Minneapolis-based maker of industrial spray, valve and pump equipment reported that quarterly sales rose 4 percent to $335 million, affected by softening construction sales and negative currency fluctuations. Profits bolted from $66.2 million, or $1.07 a share, to $173 million, or $2.90 a share, with help from the liquid filtration sale and its related investment income, the company reported Wednesday after the markets had closed.
Excluding the divestiture, earnings were $1.04 a share, 18 cents more than analysts anticipated.
The divestiture brings to an end a difficult chapter for Graco. Citing "anti-competitive concerns," the Federal Trade Commission ordered Graco to sell the division after it was acquired in 2012 from Illinois Tool Works. Graco was allowed to retain Illinois Tool's powder paint business.
The second quarter proved busy for Graco even without the divestiture. CEO Patrick J. McHale said the company grew despite the high U.S. dollar and negative currency translations that clipped $17 million from revenue and $6 million from profits.
The company grew in Europe and most of Asia, but experienced slowdowns in Russia, the Middle East, Southeast Asia and Australia.
"The Americas remain our strongest-performing region," McHale said, and the company is optimistic that its division working with contractors "will perform" in the second half of the year.
Still, currency uncertainty is expected to reduce full year 2015 sales by about 5 percent and earnings by 11 percent, he said.