Higher costs hurt Briggs’s earnings

Article Excerpt

BRIGGS & STRATTON CORP. $21 (New York symbol BGG; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 42.9 million; Market cap: $900.9 million; Price-to-sales ratio: 0.5; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www. briggsandstratton.com) makes lawn-mower engines, portable power generators, pressure washers, and snowblowers and throwers. For the fiscal 2018 second quarter, ended December 31, 2017, sales rose 4.2%, to $446.4 million from $428.2 million a year earlier. Higher demand from commercial customers for lawn and garden equipment, and snow throwers offset weaker engine sales. However, earnings before unusual items fell 28.6%, to $10.7 million, or $0.25 a share, from $15.3 million, or $0.35, a year earlier. Higher raw material and employee compensation costs drove the decline. Due to the recent cut in the U.S. corporate tax rate, Briggs now expects to earn between $1.45 and $1.62 a share for all of fiscal 2018. That’s up from its earlier forecast of $1.41 to $1.58. The stock trades at 13.7 times the midpoint of…

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