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Brunswick Moves To 1st-quarter Loss As Sales Fall

The Associated Press

LAKE FOREST, Ill. (AP) — Boat maker Brunswick Corp. said Thursday that it moved to a first-quarter loss as the recession continues to keep customers at bay and erode sales.

Results were also weakened by restructuring charges and some special tax items totaling 85 cents per share.

The company, which also makes exercise and bowling equipment, lost $184.2 million, or $2.08 per share, in the quarter. That compares with profit of $13.3 million, or 15 cents per share, a year earlier.

Analysts surveyed by Thomson Reuters, whose estimates normally exclude one-time items, forecast a loss of $1.11 per share.

Brunswick and other leisure companies have suffered as consumers continue to tighten their discretionary spending due to economic and unemployment worries. Diminishing credit has also squeezed purchases, particularly in its marine division.

"Our businesses continued to be under pressure from a variety of harsh economic factors that affected both domestic and international demand for our products, especially in our recreational marine markets," Chairman and Chief Executive Dustan E. McCoy said in a statement.

To that end, the company plans to increase its cost cutting efforts. Brunswick now expects 2009 cost savings of $240 million, up from its prior estimate of $200 million.

For the period ended April 4, sales slumped about 45 percent to $734.7 million from $1.35 billion as marine sales tumbled 52 percent. The results missed Wall Street's estimate for revenue of $747.6 million.

While Brunswick is working to lower its wholesale shipments to minimize the number of boats and engines on dealers' floors, the company said it must also contend with reduced equipment orders from its fitness and bowling customers.

Brunswick cautioned that its 2009 adjusted profit will be significantly lower than the previous year.

In morning trading Brunswick shares fell 6 cents to $5.85.