Professional equipment sales helped to mitigate lower snowplow sales and boost Toro Co.’s first-quarter results.
Profits were up 33 percent amid strong sales of residential “zero turn” riding-mowers, landscape and construction equipment and irrigation systems designed for golf courses.
The quarter’s results contrasted dramatically with Toro’s prior quarter, which was dominated by robust sales of Boss snowplow equipment. In the company’s first quarter of fiscal 2016, which ended Jan. 29, Boss product sales were negatively impacted by “a lack of snowfall,” officials said.
Still, the acquisition of Boss just over a year ago helped with profits because of a positive accounting adjustment during the quarter. Toro also enjoyed productivity improvements and lower commodity prices.
Combined, the company’s stellar results blew past analysts’ profit expectations. Profits hit $39.3 million, or 70 cents a share, far beyond the 58 cent average Wall Street analysts predicted. While sales broke a record — rising 2.6 percent to $486.4 million — they missed analysts expectations by about $5 million.
The company’s stock closed Thursday at $78.11, up 4.4 percent.
In a conference call with analysts, Toro CEO Michael Hoffman said he was “encouraged by the positive start to the fiscal year” and by the record sales.
Going forward, Hoffman said he expects 4 percent revenue growth in fiscal 2016 and earnings of $3.85 to $3.95 per share. He added that Toro’s primary sales season — golf season — is approaching and that the company’s new product lineup should contribute to a solid second quarter.
New golf equipment and irrigation products, including a Workman light-duty vehicle and an Infinity Series golf sprinkler, received good reviews last week at the Golf Industry Show in San Diego and also at the 2016 Sports Turf Managers Show in California, Hoffman said.
Professional segment sales were $339 million and largely flat during the first quarter, mainly due to the decrease in Boss sales. Division profits, however, rose $6 million to $61.6 million. Toro’s residential product sales rose 7 percent to $144 million, while profits jumped 18 percent to $16.7 million.