Snap-on Inc.'s (SNA) second-quarter earnings rose 72% as the
tool maker reported revenue gains across all segments, particularly
in its financial services business.
The company controls a big chunk of the professional tool
market, where it competes with Stanley Black & Decker Inc.'s
(SWK) Mac Tools unit and Danaher Corp.'s (DHR) Matco. It gets more
than half its sales from the U.S. and from the auto sector, but has
sought growth in emerging markets and higher-margin segments such
as power generation and aerospace. In recent quarters, sales have
improved and cost cuts have generally boosted margins.
The company posted a profit of $78 million, or $1.33 a share, up
from $45.3 million, or 78 cents a share, a year earlier. Excluding
an arbitration settlement gain, earnings rose to $1.14 from 78
cents.
Revenue increased 12% to $726.7 million, boosted by foreign
currency gains.
Analysts polled by Thomson Reuters most recently forecast
earnings of $1.07 a share on revenue of $726 million.
Gross margin widened to 47.1% from 46.9%, though operating
expenses grew.
The commercial and industrial segment, its largest by revenue,
saw sales increase 8.1%. Snap-on tools sales grew 13%. The
financial-services business posted revenue of $30.3 million, more
than double the $13.9 million a year earlier, boosted by an
arbitration settlement gain and higher earnings from the growing
on-book finance portfolio.
Snap-on shares closed at $93.11 Wednesday and were inactive
premarket. Through Wednesday's close, the stock is up 44% over the
past 12 months.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; nathalie.tadena@dowjones.com