Storms cost around $8 million in revenue
Kenosha-based Snap-on Inc. saw its profits and revenue increase during the third quarter, despite losing out on $8 million in sales because of hurricanes and recording a $15 million legal charge.
The company reported net income of $133.4 million, a 1.3 percent increase over the same period last year. Earnings improved from $2.22 to $2.29 per diluted share.
Revenue for the quarter was up 8.4 percent to $903.8 million. Most of the increase was driven by $44.5 million in additional revenue from acquisitions. Sales were up organically by $19.5 million, an increase of 2.3 percent.
Nick Pinchuk, Snap-on chairman and chief executive officer, said the major hurricanes hitting Texas and the southeast during the quarter had an impact on sales of about $8 million.
“The operations in the affected areas have generally returned to normal, except for Puerto Rico. As in the case of Superstorm Sandy in 2012, timing of both further disruptions and rebuilding aren’t clear, so they could extend into upcoming quarters,” he said.
The company also recorded a $15 million legal charge following a California court’s ruling in a labor law case, but Pinchuk said that verdict is being appealed.
Snap-on’s repair systems and information group had the strongest quarter, increasing revenue by 16.6 percent to $333.5 million. The increase included a $23.7 million or 8.2 percent organic increase in revenue, driven by increased sales of diagnostic and repair information products to repair shops, increased sales to OEM dealerships generally and increased sales of undercar equipment.
The commercial and industrial group was up 8.7 percent to $314.6 million, largely from acquisitions. Organic sales were up slightly, but Pinchuk said things were trending in a positive direction.
The tools group was hardest hit by the hurricanes and sales in the segment decreased 1.1 percent to $392.7 million. Sales were down 1.6 percent organically.
“We’re encouraged that in the third quarter we increased both sales and net earnings through our steadfast commitment to our runways for growth and improvement, despite challenges on a variety of fronts, including the recent hurricanes,” Pinchuk said.
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