Spring is in full swing now and all the happy homeowners are back outside getting their yards in shape. As you head out to work on your little piece of the world, you may notice that familiar black and red emblem on your power washer, or most likely, your lawnmower. That's the emblem of Briggs & Stratton (NYSE:BGG), the world's largest producer of air-cooled engines for outdoor power equipment. Unfortunately, even the biggest aren't without problems.

The company reported fiscal 2005 third-quarter earnings, which increased 13% to $80.6 million, or $1.56 per share. It credited the gain to higher net sales, which jumped 28% to $840.5 million, and a gain from its acquisition of assets of bankrupt Murray, Inc. If you remember, it was just last quarter that Murray left Briggs & Stratton with $40 million in unpaid bills. The company was able to recoup some of that loss through its acquisition, gaining $30 million (before taxes) from the difference between the purchase price and the estimated realizable value of Murray assets.

So, then, why did the stock drop nearly 5% yesterday? First, if you look at the first nine months of fiscal 2005, you see a bit more of a negative picture. In that time, net sales increased by $381.1 million. However, it's profits we want, and they were down $9.7 million, or 15.7% on a per-share basis (even lower if you were to back out the positive impact of extraordinary gains). And despite the strong sales, its inventory continues to grow, jumping 60% since last year. Increasing inventory relative to sales growth suggests one of two things: a strong outlook for upcoming quarters, or a recipe for discounts (resulting in lower profit margins).

The company also continues to suffer from the usual factors, including higher material costs and uncooperative weather conditions. As a result, the company trimmed its guidance toward the low end of its forecast for fiscal 2005 to a range of $143 million to $148 million, or $2.76 to $2.85 per diluted share.

With higher costs, a lowered outlook, and growing inventories, Briggs & Stratton might need some spring cleaning. Until it can show some signs of a turnaround, I'll just stick with using its product to cut my grass, rather than buying its stock.

Still craving more about Briggs & Stratton? See Rich Smith's Briggs & Stratton Stalls.

Fool contributor Mike Cianciolo welcomes feedback and doesn't own shares of Briggs & Stratton.