Amid a wave of bad news from the housing markets and continued concerns about the pace of overall economic recovery in the U.S., let me bring you a touch of good news from inside the golf course management industry — both John Deere and The Toro Co. reported strong results from the third quarter of their current fiscal years.
Deere's agriculture and turf division, which is home to John Deere Golf, reported a 12 percent increase in sales in the third quarter versus the company's performance from the same time last year, and a year-to-date bump in sales of 3 percent over 2009. Operating profit from that division in the third quarter was $824 million, compared to $480 million in third quarter of last year. It can be difficult to parse out golf's performance within this division given Deere's massive presence in agriculture, but the numbers are positive nonetheless.
Toro had good news of its own, reporting a third-quarter sales increase of 16.2 percent over last year. In it's professional segment, which is where the company's golf equipment sales reside, third-quarter sales totaled $317.9 million, which is a 21.8 percent increase over last year. That meant a corresponding bump in earnings to $62.7 million, up $23.2 million from the same period last year. Year to date, Toro's professional segment has net sales of $880.3 million and net earnings are at $156.1 million.
Executives with both companies were understated, yet encouraged, in their comments about the results.
"Even with concerns expressed by many economists of a slower recovery, we experienced strong end-user demand during our summer selling season," said Mike Hoffman, Toro's chairman and CEO. "Positive momentum for our innovative new products, especially within our professional markets, enabled us to deliver better-than-expected revenue and profit growth."
"John Deere's third-quarter performance reflected the disciplined execution of our business plans and occurred despite continued weakness in key areas," Samuel R. Allen, the chairman and CEO for Deere and Co., said.
Another sign of improvement? Both companies are expecting continued improvement in the fourth quarter and for the year as a whole. Deere is projecting worldwide sales in its ag and turf division to be up about 8 percent for the full year, with industry sales of turf and utility equipment up between 10 and 15 percent for the year.
For its part, Toro is expecting an overall increase of 10-11 percent for its earnings in fiscal year 2010. "We are encouraged by the recovery of our markets and increased demand for our products," Hoffman said.
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