Graco, the industrial pump and sprayer maker, reported tough fourth-quarter results hurt by a noncash impairment charge that stemmed from past acquisitions bearing "significant exposure" to weak oil and gas markets.
Graco's $192 million charge resulted in a loss for the fourth quarter that ended Dec. 30, officials said Monday. The Minneapolis-based company lost $104.2 million, or $1.83 per share, for the fourth quarter, despite sales that rose 7 percent to $349 million. Excluding the one-time charge, fourth-quarter profits would have been $1 per share, beating analysts's average expectations by 14 cents a share.
The results compare to net earnings of $53.5 million, or 94 cents a share, in the same quarter a year ago. Full-year results also beat expectations.
Excluding the new fourth-quarter charge and gains from the 2015 divestiture of a liquid finishing businesses, adjusted annual profits rose 3 percent to $3.55 a share, while sales grew 3 percent to $1.33 billion. On average, analysts had expected adjusted profits of $3.41 per share and sales of $1.31 billion.
Including both one-time charges, full-year 2016 earnings would have fallen 88 percent to $41 million.
In a statement, Graco Chief Executive Patrick McHale called the large fourth-quarter impairment charge a "disappointment."
"We remain committed to the long-term potential of this business," he said. "We continue to invest in commercial resources to expand geographic coverage, drive innovation, grow our channel, and increase market share. As the market recovers, we expect to benefit from these actions."
Dee DePass • 612-673-7725
