Small engines and outdoor power equipment maker Briggs & Stratton
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Briggs' revenue rose to $397.3 million, a 19% increase from the first quarter last year. The Wisconsin-based company narrowed its net losses to $5.2 million from $8.1 million in the previous year quarter. Given the seasonal nature of the business, it is common for Briggs & Stratton to incur a loss in the first quarter of its fiscal year. Analysts expected the company to lose $0.21 per share. However, Briggs merely lost $0.10 per share.
The better-than-expected performance was due to unexpected sales in its power products segment. Demand for portable and standby generators spiked in August when Hurricane Irene hit the East Coast. People stocked up on emergency supplies anticipating widespread power outages. Thus, sales of power products saw a robust 40% increase to $235.3 million.
This segment also benefited from more shipment of snow equipment, inventories of which had depleted after last winter.
The stalling engine
The engines segment, which is generally a large contributor of revenue, saw a 0.8% decline compared to the previous year quarter, down to $203.4 million. Briggs' management attributed the poor performance to lower shipment volumes due to a drop in demand for lawn and garden products.
Although Briggs' engine segment was slightly disappointing this quarter, the company remains positive on its full-year performance, raising its earnings and revenue outlook. It has increased its full-year earnings per share outlook to $1.15 to 1.35, up by $0.10, above analysts' average estimate of $1.20 per share.
The Foolish takeaway
The company's stock has not managed to go back to the highs it made before the recession. However, Briggs & Stratton looks good to grow. To stay updated, click here to add Briggs & Stratton to My Watchlist.
Navjot Kaur does not own shares in any of the companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.