2018 has been a great year for The Toro Company, and the third quarter was no exception, according to a press release from the Bloomington, Minnesota-based manufacturer of landscape irrigation and maintenance products. The company reports third-quarter net earnings of $79.0 million, or $0.73 per share, on a net sales increase of 4.4 percent to $655.8 million for the quarter that ended August 3, 2018.
Adjusted 2018 third quarter net earnings were $73.5 million, or $0.68 per share, compared to adjusted net earnings of $65.5 million, or $0.58 per share in the comparable 2017 period, an increase of 17.2 percent.
For the first nine months, Toro reported net earnings of $232.9 million, or $2.14 per share, on a net sales increase of 3.1 percent to $2,079.3 million. Due to the one-time impacts of U.S. tax reform, the first nine months reported net earnings were slightly lower than the comparable 2017 reported net earnings of $233.9 million, on net sales of $2,016.5 million.
The company’s adjusted net earnings for the first nine months were $255.9 million, or $2.35 per share, compared to adjusted net earnings of $215.0 million, or $1.93 per share, in the comparable 2017 period, an increase of 21.8 percent.
Third-quarter operating earnings as a percent of sales were 14.2 percent, an improvement of 20 basis points compared to 14.0 percent in the same period last year. Operating earnings as a percent of sales for the first nine months was 15.9 percent, an improvement of 60 basis points compared to the same period last year.
“As anticipated, we saw strong demand for our walk, power and zero-turn mowers as our residential business rebounded nicely after the slow start to spring,” says Richard M. Olson, Toro’s chairman and chief executive officer.
“The success of new products also helped bolster sales in our landscape contractor businesses, which drove professional segment revenue growth for the quarter,” continues Olson. “New products like the Exmark Radius, the Toro TITAN HD and the new diesel-powered zero-turn mowers in our landscape contractor businesses have been well received.”
“Looking ahead, both our BOSS Snowplow and residential snow businesses have strong orders in hand and are well positioned for the coming season,” says Olson.
“We are excited about new innovative product introductions like the Toro Power Max HD two-stage snow thrower and the BOSS rear-mounted plow that allows the operator to efficiently pull and clear snow for enhanced productivity,” Olson says. “Other customer favorites, like the EXT extendable plow and our line of V-box spreaders continue to build momentum.”
“In an environment of increasing input costs, particularly for steel and freight, we are committed to leveraging operational efficiencies with a continued emphasis on productivity to mitigate the inflationary pressures,” says Olson.
Revenue growth for fiscal 2018 is projected to be about 4 percent, with adjusted net earnings per share about $2.66 to $2.69 for fiscal 2018. This reflects the near-term impact of recently announced and enacted trade policy changes, tariffs and related inflationary pressures on input costs.
Strong sales of Toro’s landscape contractor equipment were the key driver of the positive results for the quarter. The new zero-turn mowers introduced this year in both the Exmark and Toro landscape businesses have been well received. Net sales of this equipment for the third quarter were $482.5 million, up 3.0 percent from $468.6 million last year.
Professional-segment net sales were $1,546.5 million for the first nine months, up 6.6 percent from the co-parable 2017 period. Robust demand for landscape contractor zero-turn mowers, large-reel golf and grounds equipment and rental and specialty construction equipment contributed to the results for the period.
Earnings from sales of landscape contractor products for the third quarter were $97.7 million, up 0.4 percent from $97.4 million in the same period last year. Professional segment earnings for the first nine months were $338.6 million, up 7.6 percent from $314.5 million compared to the same period last year.