Snap-On (SNA) Q2 Earnings Beat Estimates, Revenues Up Y/Y
Zacks Investment Research | Jul 19, 2017 09:35PM ET
Snap-on Incorporated (NYSE:SNA) maintained its impressive earnings beat streak, posting second-quarter 2017 net earnings of $2.60 per share. Earnings surpassed the Zacks Consensus Estimate of $2.55 by 1.6%. The bottom line also reflected an increase of 10.2% from the year-ago figure of $2.36.
The bottom line benefited from Snap-on’s robust business model and focus on value-creation processes. Also, organic top-line growth proved conducive to the earnings performance.
Inside the Headlines
Net sales in the quarter increased 5.6% year over year to $921.4 million, but missed the Zacks Consensus Estimate of $922 million by a whisker. Excluding acquisition-related expenses and unfavorable foreign currency translation effect, organic sales rose 2.7% year over year.
Solid sales growth at Snap-on Repair Systems & Information and Commercial & Industrial Group drove the top line. However, unfavorable foreign currency translation restricted revenue growth to some extent.
Segment wise, Commercial & Industrial Group sales rose 8.5% to $310 million. Organic sales were up 4.7% primarily owing to strong performance in the European-based hand tools business. Also, higher sales to customers in critical industries, including military, drove the top line at this segment. Unfavorable foreign currency translation had a $4.9-million impact on sales, thereby offsetting organic growth to an extent.
Snap-on’s Tools Group revenues edged down 0.7% year over year to $413.8 million. Organic sales at the segment recorded a minor improvement of 0.5%, but unfavorable foreign currency translation impact of $5 million more than offset the same.
Repair Systems & Information continued to display strength, as revenues climbed 14.5% year over year to $338.1 million. Meanwhile, organic sales at the segment improved 8.3%. Higher sales of diagnostics and repair information products to independent repair shop owners and managers, OEM dealerships and undercar equipments drove strong organic growth at the segment.
On the other hand, the Financial Services business reported revenues of $77.7 million compared with $69.3 million recorded in the year-ago quarter.
Operating earnings before financial services in the quarter came in at $183.7 million, up 10.4% from $166.4 million in the prior-year quarter.
Snap-On Incorporated Price, Consensus and EPS Surprise
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