Tennant Co. posted a 3.4 percent increase in earnings for the second quarter, carried by record sales in the Americas region.
The Golden Valley-based maker of floor cleaning machines posted net income of $15.3 million for the quarter, up from $14.8 million in the same quarter of 2015.
Diluted earnings per share for April, May and June were 85 cents per share, up 7.6 percent from the 79 cents per share in the same quarter last year. Earnings easily beat analysts' expectations of 71 cents per share for the quarter. Earnings per share adjusted for negative currency exchange rates were 89 cents per share in the quarter.
The results were boosted by the strongest organic sales results in Europe, the Middle East and Africa since the second half of 2014. Sales for the quarter were $216.8 million, up from $215.4 million in the same quarter last year.
Tennant CEO Chris Killingstad, in a presentation to analysts, credited new products and innovations for the revenue growth.
"Our equipment sales from products introduced within the last three years was 35 percent, well above the 26 percent that we reported for the full year of 2015, and above our target of 30 percent," he said.
Killingstad said Tennant is on pace to introduce 14 new products in 2016, including several new machine launches. They will help the company achieve goals set in 2014 to reach annual revenue of $1 billion, with an operating margin of 12 percent.
While the company is committed to those goals, sluggish economic conditions led it to narrow its full-year revenue guidance for 2016. However, it raised its earnings guidance for the rest of the year after adjusting for estimated foreign currency exchange rates.
Tennant now expects full 2016 sales to be in the range of $800 million to $820 million, compared to the previous guidance of $795 million to $825 million. Shares closed Tuesday at $60.80 per share, up $3.22 per share or 5.6 percent on the day.
