Monday, Graco Inc. (GGG) reported an increase in profit for the fourth quarter on lower operating expenses despite lower revenues.
Net earnings increased to $17.22 million or $0.28 per share from $10.08 million or $0.17 per share in the year-ago period.
On average, eight analysts polled by Thomson Reuters expected the company to earn $0.26 per share. Analysts' estimates typically exclude special items.
According to the Minneapolis, Minnesota-based company, total sales for the quarter declined by 12% to $146.31 million from $166.68 million in the year-ago quarter. Six Wall Street analysts estimated a revenue of $144.01 million for the quarter.
Segment-wise, industrial sales declined to $86.12 million from $97.91 million a year-ago and contractor sales declined to $45.33 million from $50.78 million a year-ago. Lubrications sales declined to $14.85 million from $17.99 million in the prior year period.
The company said that for the quarter, sales decreased 20% in the Americas and 14% in Europe or 21% at consistent translation rates. Fourth quarter sales increased 15% in Asia Pacific or 10% at consistent translation rates.
Gross profit margin, expressed as a percentage of sales, was 53% for the quarter, up from 49% for the fourth quarter last year. Approximately half of the increase was from favorable effects of currency translation. Costs related to workforce reductions lowered the 2008 fourth quarter gross margin rate, accounting for approximately 1% point of the increase in 2009.
The cost of products sold for the quarter decreased to $68.97 million from $85.28 million in the year-ago period.
According to the company, total operating expenses for the quarter and year were down 19% for the quarter and year, benefited by the effects of spending reductions including lower workforce reduction expenses and lower volume-related expenses. The effects of currency translation increased expenses for the quarter by approximately $1 million and decreased expenses for the year by approximately $3 million.
Year-to-date, net earnings declined to $48.96 million or $0.81 per share from $120.87 million or $1.99 per share in the year-ago period. Net sales for the entire year declined to $579.21 million from $817.20 million a year-ago. The street estimated earnings of $0.81 per share on revenues of $576.94 million for the fiscal year.
GGG closed Monday's last trade on the New York Stock Exchange at $29.99, down $0.47 or 1.54%, on a volume of 525 thousand shares. In the afterhours the stock traded up $0.47 or 1.57%.
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