Thursday, lawn care products manufacturer The Toro Company (TTC) reported a sharp decline in profit for the third quarter, which, however, came in above analysts' estimates. Quarterly results were impacted mainly by litigation costs and lower revenues. Further, the company lowered its fiscal 2009 earnings guidance.
For the quarter, net income was $19.78 million or $0.54 per share, down from $38.23 million or $0.99 per share in the same quarter prior year. On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.49 per share for the quarter. Analysts' estimates typically exclude special items.
The Bloomington, Minnesota-based company's quarterly revenue dropped to $394.86 million from $492.64 million in the previous year, due to lower overall demand and lower sales across most product categories in the Professional segment. Analysts estimated revenues of $373.17 million.
Segment-wise, revenue from Professional segment declined to $260.89 million from $359.07 million, while Residential revenue was $126.18 million, up from $124.67 million a year ago. Other revenue edged down to $7.79 million from $8.89 million in the previous year.
For the three month-period, the company's other expense increased to $4.0 million from $0.4 million in the prior-year quarter, mainly due to one-time expenses for several legal matters.
For the nine-month period, net earnings plunged to $63.37 million or $1.73 per share from $119.64 million or $3.06 per share in the comparable period a year ago. Year-to-date, revenue was $1.23 billion compared to $1.54 billion in the prior year.
Looking ahead, for the full fiscal 2009, the company lowered its earnings per share guidance to a range of about $1.53 to $1.63 from the previous guidance range of $1.60 to $1.80. The guidance revision to consequent to anticipated one-time charges of $0.15 per share in the third quarter to account for workforce adjustments, valuation allowance for taxes, and expenses for several legal matters. The company continues to expect fiscal 2009 revenues to decline about 18% from last year.
Analysts currently expects the company to report earnings of $1.64 per share on revenues of $1.50 billion.
TTC is currently trading at $37.43, up 1.44%, on the NYSE.
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