Brunswick Corp.'s (BC) fourth-quarter loss widened amid diving
sales for the company's boats and marine motors, paired with higher
discounts.
Shares fell 3.7% to $11.85 in early trading as results were
slightly worse than analysts expected.
Big ticket items like boats have fared poorly during the
recession and Brunswick responded with downsizing, lowering output
and cutting inventory. Steep discounts and sales incentives hurt
the latest quarter's results.
The company plans to improve revenue through fewer discounts and
sales growth to move toward "significantly reduced operating losses
in 2010" though the company said the outlook remains "challenging
for the foreseeable future." Standard & Poor's Rating Services
recently upgraded Brunswick to stable on strong liquidity.
Nonetheless, "We exited 2009 with $527 million in cash, a
stronger dealer network with low inventories, and a leaner company
with a significantly reduced cost structure," said Chairman and
Chief Executive Dustan E. McCoy.
Brunswick reported a loss of $124 million, or $1.40 a share,
compared with a prior-year loss of $66.3 million, or 75 cents a
share. The latest results included a net 42 cents in tax-related
gains. Revenue fell 22% to $657.3 million.
Analysts polled by Thomson Reuters forecast a loss of $1.32 on
revenue of $659 million.
Gross margin fell to 11.4% from 14.1%.
The marine-engine division's sales, comprising half of the
company's revenue, were down 11%. Revenue at the boat segment sank
38%.
-By Joel Stonington, Dow Jones Newswires; 212-416-2934;
joel.stonington@wsj.com