Ditch Witch and the other brands acquired with Charles Machine Works earlier this year helped drive Toro's quarterly revenue up nearly 30%.
The Perry, Okla.-based manufacturer of underground construction equipment was Toro's largest-ever acquisition, for $700 million, and Chief Executive Richard Olson said integration of Charles Machine into the company is going according to plan.
"The entire team has been collaboratively working to optimize the combined enterprise, with a focus on consistent execution, an unwavering commitment to innovation and a focus on customer relationships," Olson said in a statement.
The $838.7 million in revenue for the third quarter was shy of analysts' expectations of $876.4 million.
However, adjusted earnings of 83 cents a share, up 22.1% over the same period a year ago, did beat the consensus prediction of analysts by a dime. Net income was $60.6 million, down from $70.9 million in the same quarter a year ago.
Bloomington-based Toro said earlier this month that it would realign its underground business and streamline its marketing, sales and service functions as part of the Charles Machine integration.
The company also said it would discontinue products in its Toro-branded large horizontal directional drill and riding trencher categories.
When Toro announced the acquisition earlier this year, executives said the company would realize $30 million in savings from synergies between the two companies. Olson said the progress is encouraging.
Sales in Toro's professional segment were $678.8 million, up 40.3% when adding in Charles Machine brands. The segment earned $81.6 million, down 16.5% from the third quarter last year. Those earnings included the acquisition costs and the costs associated with the wind down of Toro's branded underground equipment.
Sales in Toro's residential segment were $148.2 million, down 11% from the previous year on weaker shipments of its residential zero-turn mowers. The segment still managed a small increase in earnings to $16.2 million.
Shares of Toro closed Thursday at $72.41, up less than 1%.
Toro's shares year-to-date are up nearly 30%.
Patrick Kennedy • 612-673-7926
