Foreign currency translations and acquisition expenses slashed Graco Inc.'s third-quarter profits about 15 percent, company officials said Wednesday after the market closed.
The Minneapolis-based maker of industrial spraying and painting machines saw third-quarter sales rise 5 percent to $319 million. Profits, however, were $50.7 million, or 86 cents a share, down from $59.6 million, or 97 cents a share, in the same quarter a year ago.
Still, earnings beat Wall Street expectations of 84 cents a share.
Officials noted that the high U.S. dollar continues to affect results. Changes in currency translation rates reduced sales by $16 million during the quarter and $46 million year-to-date. They also cut earnings by $6 million for the quarter.
On a same currency basis, however, officials noted that all geographic regions grew. "The Americas continued its solid performance, with contributions from both the contractor and industrial segments, while the European/Middle East and Asia-Pacific regions grew at a low single-digit pace," officials said.
Separately, Graco reported expenses from acquired operations of $8 million for the quarter and $21 million so far this year. Spending related to regional and product expansion initiatives increased year-to-date expenses by about $3 million.
Graco reiterated that the government-mandated sale of the liquid finishing business it acquired in 2012 was completed in April and would affect comparative results going forward. This quarter, net earnings included $2 million worth of after-tax investment income related to the business. Year to date, it realized $141 million in investment income. It also realized $9 million in 2014 income tax benefits that will not recur.
Graco stock closed Wednesday at $67.41, down 83 cents a share.
