DOW JONES NEWSWIRES
Snap-on Inc.'s (SNA) third-quarter earnings surged 83% as the toolmaker saw demand continue to stabilize and the results beat analysts' expectations.
Snap-on controls about 55% of the professional tool market, where it competes with Stanley Black & Decker Inc.'s (SWK) Mac Tools unit and Danaher Corp.'s (DHR) Matco, according to Morningstar estimates. Snap-on gets more than half its sales from the U.S. and from the auto sector but has sought growth in emerging markets and higher-margin segments such as power generation and aerospace. Prior cost cutting also has boosted margins in recent quarters.
The company reported a profit of $46.5 million, or 80 cents a share, up from $25.4 million, or 44 cents a share, a year earlier. Revenue increased 12% to $653.1 million after falling 17% a year ago.
Analysts polled by Thomson Reuters most recently forecast earnings of 68 cents a share on revenue of $622 million.
Gross margin rose to 46.1% from 44.8%.
Commercial and industrial segment, its largest by revenue, saw sales rise 19% and earnings more than triple on the higher sales and prior restructuring efforts. The tools group posted 11% sales growth, but earnings fell 4.4% amid 2009 inventory gains.
The financial-services business returned to the black as revenue more than doubled to $17.2 million primarily on its portfolio growth since it ended a joint venture last fall with CIT Group Inc. (CIT) in which it had sold loans made to Snap-on customers.
Snap-on shares closed Thursday at $48.79 and were inactive premarket. The stock is up 30% the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com