With the help of big snowfalls, Toro Co. breezed past expectations for its latest quarterly results announced Thursday. But the company's outlook for its next quarter and fiscal year fell below Wall Street estimates.
Sales jumped 8.3 percent to $414.1 million, while earnings more than doubled to $10.9 million, or 19 cents a share for the fiscal fourth quarter that ended Oct. 31. Analysts expected sales of $409.9 million and a profit of 15 cents a share.
Toro told investors to expect a profit of 47 cents a share in the November-January period, lower than the 54 cents analysts had forecast. Toro shares fell 2.7 percent to $64.97 Thursday.
Chief executive Michael Hoffman told analysts during a conference call that the first quarter is one of the smallest quarters of the year for the Bloomington-based manufacturer. Hoffman said he was delighted with fourth-quarter results and noted that annual sales hit $2.2 billion for the first time. Record snowfalls helped both results.
"The snow category obviously had strong sales up to this point," said Mark Herbeck, a partner and equity research analyst with Cleveland Research Co.
Snow-related product sales climbed all year as unusual cold and snow hit the United States and Canada throughout the winter, spring and fall of this year. The fourth quarter saw "robust preseason demand [of snowblowers] that began late this summer and continued through the end of our fiscal year," Hoffman said.
Toro's residential segment sales jumped 19 percent during the quarter and 24 percent for the year. Its professional line of golf course, landscape and agricultural irrigation products rose 5 percent during the quarter and 8.6 percent for the year.
Other highlights included growth in newer construction equipment and "micro-irrigation" products and lower raw-material costs and interest expenses. Strong North American results overcame flat international sales and negative currency trends. For the year, Toro achieved its "Destination 2014" revenue and profitability targets, Hoffman said.
Last month, Toro completed its largest acquisition to date, the $227 million purchase of the Boss professional line of snowplows and ice-melt chemical-spreaders. Boss is expected to do well next year, especially if snow patterns repeat last year's, Hoffman said.
For fiscal 2015, Toro will spend $75 million on factory projects and expects total sales growth of 8 to 10 percent. Profits should be in the range of $3.30 to $3.40 a share, up from $3.02 in the just-finished year. Analysts had estimated higher 2015 profits and expected $3.43 a share and sales of 2.35 billion.