Wednesday, Graco Inc. (GGG) reported a sharp decline in its profit for the third quarter, as revenues decreased 29%, impacted by lower sales and orders in all segments and regions.
Graco's net income for the quarter decreased to $17.3 million or $0.29 per share from $32.8 million or $0.54 per share in the prior-year period. On average, eight analysts polled by Thomson Reuters expected the company to report earnings of $0.19 per share. Analysts' estimates typically exclude one-time items.
Net sales for the quarter declined to $147.3 million from $207.2 million a year ago. Six analysts expected revenues of $141.44 million for the quarter.
Segment-wise, indusrtial segment sales declined to $78.24 million from $ 117.68 million, contractor segment sales decreased to $55.37 million from $67.75 million and sales for lubricant segment slid to $13.68 million from $21.79 million last year. Region-wise, sales decreased 25% in both America and Asia-Pacific and 39% in Europe.
Gross profit margin for the quarter remained flat with last year's 53%, primarily due to favorable effects of pricing, lower material costs and cost reduction actions, offset by decreases from lower production volume and increased pension cost.
Total operating expense declined 10%, affected by decrease in spending and lower volume-related expenses while operating income for the quarter declined to $26.18 million compared with $52.52 million in the year-ago period. Selling, general & administrative expenses for the quarter decreased to $26.58 million from $32.42 million in the prior year quarter.
Patrick McHale, president and chief executive officer said," We expect to continue investing in growth initiatives including product development, international expansion and entering new markets. We believe the Company will emerge from the recession with strong, profitable growth."
For the nine months ended September 25, net income declined sharply to $31.73 million from $110.79 million, and net sales decreased to $432.90 million from $650.58 million last year.
Wednesday, Graco lasted traded at $29.54, up $0.46 or 1.69%, on a volume of 0.61 million shares, on the NYSE.
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