Briggs & Stratton shares fall after mixed fiscal 2Q earnings, grim outlook

Briggs & Stratton Corporation (NYSE:BGG) stock tumbled Thursday after the manufacturer of gasoline engines reported a mixed bag of second-quarter earnings and lowered its guidance for the full 2019 fiscal year.

The Wauwatosa, Wisconsin-based company posted earnings of $0.20 per share on revenue of $505.5 million. The consensus earnings estimate was $0.26 per share on revenue of $463.9 million. 

Investors sent shares of the American Fortune 1000 manufacturer down 16% to $11.50 after it cut its net income guidance for the full 2019 fiscal year to between $1.10 and $1.30 per share Wednesday after previously estimating that figure between $1.40 and $1.60 per share.

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“The market headwinds caused by the drought conditions in Australia and Europe as well as the Sears bankruptcy have resulted in a decrease to our fiscal 2019 outlook, but we expect much of these headwinds to ease by next season,” said Briggs & Stratton CEO Todd J Teske.

The company said it expects a $30 million sales impact from Sears Holding’s (OTCMKTS:SHLD) bankruptcy filing and a $40 million sales impact from the weather-related issues in Australia and Europe.

On the bright side, an ongoing business optimization program is expected to generate $35 million to $40 million in pre-tax savings for the company by 2021.

Briggs & Stratton makes gasoline engines for outdoor power equipment for original equipment manufacturers in the US. It also has its own products their trademark four-cycle aluminum alloy gasoline engines often find their way into lawn mowers, snow throwers, standby generators, pumps, and garden equipment. Brands include Briggs & Stratton, Simplicity, Snapper, Ferris, Allmand, Billy Goat and Murray.

Founded in 1908, the company has 13 large facilities in the US and eight more in Australia, Brazil, Canada, China, Mexico, and the Netherlands.

Contact Uttara Choudhury at [email protected]

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Story by ProactiveInvestors