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Toro Profit Increases 58%

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The professional landscaping and irrigation-products business was especially strong.

Wall Street Journal | February 18, 2011

Toro Co.'s fiscal first-quarter earnings rose 58 percent amid strength at its professional landscaping and irrigation-products business.

For the year, Toro raised its per-share earnings forecast by 20 cents to $3.40 and increased its revenue-growth estimate by two percentage points to 7 percent.

For the current quarter, the company expects per-share earnings of $1.58.

"Significant snowfalls drove strong retail demand for snow products, which helped the quarter, and also provided revenue for landscape-contractor customers, which will support purchases of mowing equipment as we head into spring," Chairman and Chief Executive Michael Hoffman said.

Demand for Toro's landscaping and irrigation equipment has been rebounding from the recession, when weakness in the sector led the company to cut costs. New products, particularly in the company's professional division, also have been gaining traction.

Toro resumed production of its electric snowblowers and its Power Shovel, a $100 motorized vacuum-like device that sucks up snow and spits it away. The company, based in Bloomington, Minn., has experienced strong sales because of heavy snows throughout the U.S. since Christmas. Still, snowblowers are a small part of Toro's business.

For the quarter ended Jan. 28, Toro posted a profit of $17.3 million, or 53 cents a share, up from $10.9 million, or 32 cents a share, a year earlier. The company in December expected earnings of 40 cents a share. Revenue increased 16 percent to $383.2 million.

Gross margin rose to 35.7 percent from 35.1 percent.

The professional segment, which includes landscaping and irrigation equipment and is the company's largest business by revenue, posted sales growth of 21 percent. Earnings rose 47 percent.

Sales for the residential business, which includes lawn mowers and snowblowers, increased 5.6 percent though earnings declined 15 percent.

 

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