New Brunswick, 3rd quarter profits down, driven down by big boats

Boats produced by Brunswick Group

The Brunswick Group, world leader in yachting, is lowering its profit forecasts for 2017.

Sales up

The Brunswick group announced sales volume of $1.14 billion in the third quarter of 2017 compared to $1.09 billion the previous year. Net income decreased from $85.3 million to $79 million in 2017. Mark Schwabero, President of Brunswick, is pleased with the state of the market. "Our revenue increased 4.4% in the 3rd quarter, reflecting strong growth in the aluminum outboard motors and boats sectors, as well as solid growth in our parts and accessories business. Global demand in international markets remains strong, driven by gains in Europe, Canada and Asia Pacific."

Large boats and hurricanes lower results

Mark Schwabero mentions several factors explaining the drop in profits. "Headwinds have lowered profits in the boat sector. As mentioned in the 2nd quarter, we significantly reduced the production of our large composite boats, in response to weak demand from resellers in recent quarters. Hurricane Irma further disrupted our production capacity in Florida in September."

Outboard engines division on the rise

The Brunswick marine engine segment posted sales up 7% to $669.2 million. Operating income totalled $115.2 million, up $5.7 million over the year. Growth was driven by the sale of outboard motors and solid growth in spare parts and accessories.

Lower Forecasts

Anticipating that the problems encountered in the third quarter should continue into the latter part of the year, Brunswick is revising its annual forecast from $3.87 to $3.85.

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