Toro Co.’s fourth-quarter results beat Wall Street’s expectations Thursday, helping to push the lawn equipment firm over $2 billion in annual sales for the first time.
Still, officials for the Bloomington-based maker of lawn mowers and snowblowers warned Thursday that results for the November-to-January period could suffer from a difficult comparison to last year, when Toro enjoyed a large tax benefit and a bump in sales from products bearing a new low-emission diesel engine.
Company officials issued forecasts for the fiscal first quarter and full 2014 that were below analysts’ expectations. That drove Toro shares as low as $57.60 on the New York Stock Exchange on Thursday morning before an afternoon recovery brought the close of $59.31, still down 92 cents, or 1.5 percent.
Analysts said investors reacted negatively to the forecasts, ignoring the most recent quarter. The fourth quarter “outperformed their prior guidance by 10 percent,” said Cleveland Research Co. analyst Tom Mahoney.
The quarter’s results surged amid product price increases, steady commodity prices, and a boost in sales of golf and professional landscape mowers, irrigation systems and Toro’s new line of construction equipment. Revenue rose 12.7 percent to $382.4 million, while earnings increased to $5 million, or 8 cents a share. Analysts had expected just 3 cents a share.
Earnings were much better than the same quarter a year ago. At that time, Toro earned just $251,000 in the fourth quarter as consumers put off traditional preseason snowblower purchases.
For next year, CEO and Chairman Mike Hoffman told analysts during a conference call that the company expects a comparatively mild first quarter. However, he said the second and third quarter are expected to grow substantially.
Hoffman expects 2014 sales to grow 4 to 5 percent and net earnings to reach $2.85 to $2.90 a share. That’s slightly below the consensus market expectation of $2.92 a share. Toro expects first-quarter earnings will be 35 cents a share, which is far below the average 49 cents expected by analysts.