The Toro Company Reports Unaudited Consolidated Earnings Results for the First Quarter Ended February 2, 2018; Provides Income Tax Rate Guidance for the Full Year 2019 and Earnings Guidance for the Second Quarter; Revises Earnings Guidance for the Full Year 2018
February 22, 2018 at 08:30 am EST
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The Toro Company reported unaudited consolidated earnings results for the first quarter ended February 2, 2018. The company reported net earnings of $22.604 million or $0.21 per diluted share against $44.99 million or $0.41 per diluted share a year ago. Operating earnings were $66.922 million against $60.57 million a year ago. Earnings before income taxes were $66.385 million against $59.553 million a year ago. Net sales were $548.246 million against $515.839 million a year ago. Net cash provided by operating activities was $8.095 million against $15.294 million a year ago. Purchases of property, plant, and equipment were $10.784 million against $11.62 million a year ago. Adjusted 2018 first quarter net earnings were $52.1 million, or $0.48 per share, which includes $0.06 benefit from the lower corporate tax rate, partially offset by $0.03 attributed to the excess tax deduction for share-based compensation, compared to adjusted net earnings of $40.1 million, or $0.37 per share in the comparable 2017 period, an increase of 29.7%. The quarter was significantly impacted by the enactment of U.S. tax reform. The increase was driven by the provisional re-measurement of deferred tax assets and liabilities, and provisional calculation of the deemed repatriation tax, which resulted in discrete tax charges of $20.5 million and $12.6 million, respectively.
The company currently estimates that its full fiscal year adjusted 2018 effective income tax rate will be about 23%. The company continues to expect revenue growth for fiscal 2018 to exceed 4%. The company's prior full year EPS guidance was $2.57 to $2.63 which included a $0.17 benefit for the excess tax deduction for share-based compensation at pretax reform rate. The adjusted full year EPS guidance for fiscal 2018 now excludes the $0.17 benefit from the excess tax deduction for share-based compensation and it includes a $0.27 benefit related to the post tax reform lower corporate tax rate. The company adjusted guidance also excludes the $0.30 onetime charge associated with tax reform. This results in an adjusted fiscal 2018 EPS guidance of $2.67 to $2.73.
For the second quarter, the company expects adjusted net earnings per share to be about $1.17 to $1.22.
For fiscal 2019, the company currently estimates that its adjusted effective income tax rate will be about 21% to 23%. The exclusion of the excess tax benefit for share-based compensation increases adjusted effective tax rate by about 3 points for fiscal 2018 and 2019.
The Toro Company designs, manufactures, markets and sells professional turf maintenance equipment and services; turf irrigation systems; landscaping equipment and lighting products; snow and ice management products; agricultural irrigation (ag-irrigation) systems; rental, specialty and underground construction equipment, and residential yard and snow thrower products. The Company operates through two segments: Professional and Residential. The Professional segment consists of turf and landscape equipment; rental, specialty, and underground construction equipment; snow and ice management equipment, and irrigation and lighting products. The Residential segment consists of consists of walk power mowers, zero-turn riding mowers, snow throwers, replacement parts, and home solutions products, including grass trimmers, hedge trimmers, leaf blowers, blower-vacuums, chainsaws, string trimmers, and underground, hose, and hose-end retail irrigation products sold in Australia and New Zealand.
The Toro Company Reports Unaudited Consolidated Earnings Results for the First Quarter Ended February 2, 2018; Provides Income Tax Rate Guidance for the Full Year 2019 and Earnings Guidance for the Second Quarter; Revises Earnings Guidance for the Full Year 2018