Outdoor power equipment OEM The Toro Company reported record net earnings of U.S. $34.4 million, or $0.74 per diluted share, on net sales of $466.9 million for its fiscal third quarter ended July 29, 2005. In the comparable fiscal 2004 period, Toro reported net earnings of $34.2 million, or $0.66 per diluted share, on net sales of $454.0 million.
For the nine months ended July 29, 2005, Toro reported net earnings of $107.5 million, or $2.29 per diluted share, on net sales of $1,442.3 million compared with net earnings of $95.7 million, or $1.84 per diluted share, on net sales of $1,315.6 million in the first nine months of fiscal 2004.
Earnings per share figures for all periods reported were adjusted to reflect the effects of a 2-for-1 stock split effective March 28, 2005.
"Sales growth in international markets helped drive revenues to record levels for the third quarter in both the professional and residential segments helping to mitigate weather related softness in our domestic markets," said Toro President and CEO Michael J. Hoffman. "Despite a challenging environment, year-to-date consolidated net sales are nearly 10 percent ahead of fiscal 2004's record level."
"Our strong performance in the third quarter and year-to-date gives evidence of our ability to sustain solid earnings growth and has us on track to deliver another record year of financial results," added Toro Executive Chairman Kendrick B. Melrose. "We continue to enhance our operating model to reduce the volatility to external factors such as weather, while tenaciously focusing on strategic initiatives that will drive sustainable long-term growth and profitability."
Toro, based in Bloomington, Minnesota, U.S., reports that 62 percent of its 2004 revenues came from sales to the professional landscaping market, while 34 percent came from sales to the residential market. (Toro-owned domestic distributors and other income sources make up four percent of revenues.)
Segment results show 2005 year-to-date professional segment earnings totaled $183.4 million on net sales of $936.8 million, compared with earnings of $154.5 million on net sales of $834.1 million in last year's first nine months. Year-to-date residential segment net sales were $472.2 million, up 8.1 percent compared with the first nine months of fiscal 2004.
Toro said it expects net earnings per diluted share for fiscal 2005 to exceed last year's record levels by 16 to 18 percent on revised sales growth of 7 to 9 percent.
"For the fiscal year, financial performance will benefit from a favorable mix of businesses and strong expense management," said Hoffman. "With sales growth in nearly all professional segment categories and consistent returns from our international growth initiatives we will improve upon last year's record financial performance despite higher materials costs and unfavorable weather."
Hoffman attributed the company's achievements to its 6+8 profit improvement and growth initiative. "Our lean manufacturing and No Waste initiatives helped us to preserve strong profitability in the face of rising materials costs," he said. "The efficiencies we are now achieving are sustainable and will continue to benefit our profitability going forward."
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