Two of golf course maintenance's equipment giants — The Toro Co. and John Deere — released their fiscal scorecards for the third quarter of 2009 this week, and depending on your point of view, the numbers were either mildly encouraging or slightly depressing.
Both companies unveiled sales and income figures that were better that most experts on Wall Street had predicted. However, the figures for both companies were significantly down from the same period in 2008, offering further proof that while the general economy may be on the cusp of recovery, the golf industry is still lagging behind.
On Thursday, Toro announced that its third-quarter profits had dropped 48 percent compared to third-quarter 2008, thanks largely to sagging sales in its professional division, which includes golf and landscape equipment. For the quarter that ended July 31, Toro earned $19.8 million, compared with $38.2 million a year ago. Year-to-date profits are trailing at about the same pace, off 47 percent.
Overall sales for the company were off 20 percent at $394.9 million, down from $492.6 million from the same time last year. Again, it was professional sales that dropped the most, down 27 percent to $260.9 million. That closely mirrors the year-to-date figures, which are down 26.7 percent at $800.6 million.
As mentioned, the news wasn't all bad for the boys in red — sales in the residential market actually rose 1.2 percent to $126.2 million and the overall revenue results actually beat those Wall Street predictions, which had called for only $373.2 million in sales. And CEO Michael J. Hoffman put a positive spin on the news, saying that the company's focus on the retail market and improving market share in other categories was bearing some fruit, and that internal realignments of cost structures and a reduction in inventory was putting the company "in a better position."
Deere and Co.'s worldwide net income number for the third quarter was $420 million, which was off 27 percent from the $575.2 million it made during the same period in 2008. The company's overall sales and revenue numbers slipped 24 percent from a year ago to $5.885 billion.
In the agriculture and turf division, home to John Deere Golf, sales were down 21 percent for the quarter but just nine percent year-to-date. Operating profit in the third quarter was $480 million, compared with $725 million in 2008. For the full year, the company is forecasting a decrease of about 15 percent in full-year sales. Projections on sales of turf equipment and compact utility tractors in the U.S. and Canada is expected to be down about 20 percent, the company said.
Much like Hoffman, Deere and Co.'s president and chief executive officer Samuel R. Allen was optimistic in his official statement, saying the company "had completed a solidly profitable quarter in the face of persistent global economic pressure."
Jacobsen, through it's parent company Textron, has not yet released third-quarter figures.
Comments