Toro Declares 2-For-1 Stock Split
The Toro Company announced a 2-for-1 stock split on Thursday, a move that will halve the price of its shares come September 16 and double the number of shares in each investor’s pocket.
The Bloomington-based lawn maintenance equipment manufacturer announced the split in its third quarter report. For the three-month period ending July 29, Toro took in a record $55.8 million in earnings—or $1 per share—on sales of $601 million.
While the company’s earnings per share topped analyst estimations by a penny, its sales fell well short of the $623.1 million that was expected. Toro’s profits also outpaced its result from last year’s third quarter—up by 4.7 percent from $53.3 million—as its sales fell by 1.4 percent from $609.6 million previously.
“With mixed consumer retail activity in the quarter, as was felt across the industry, we were encouraged by overall retail demand for our walk power and zero turn riding mower products during the summer months,” said Toro CEO Michael J. Hoffman in a statement.
One of the reasons behind the slight drop in sales, Hoffman pointed out, was because of challenging weather conditions in certain regions.
“We see positive momentum in our golf equipment and irrigation businesses as we gain share in key markets,” he said. “Additionally, our specialty construction and rental businesses are experiencing solid growth and are benefitting from new product introductions.”
Toro’s division of products for professional use experienced an uptick in both revenue and profit for the quarter. The company said its Dingo TX 1000 compact utility loader was a hot ticket item for buyers within both rental and specialty construction businesses.
Toro’s residential business, however, struggled to turn up a result as strong as last year’s. Its sales of items like walk power and riding mowers dipped 4.6 percent to $167.8 million, while profits took a 38 percent dive to $12.8 million.
Both of the company’s sales divisions ultimately missed Wall Street expectations.
The company said it would narrow its full-year earnings outlook by a nickel, upping it from $3.90 to $4 per share to $3.95 to $4 per share.
Toro’s stock took a $2.50 tumble in early morning trading, but it has since risen above its Wednesday closing price of $93.89 to $94.08.
The company said it would initiate its 2-for-1 stock split on September 16 to all shareholders of record as of September 1. Typically, a stock split is done because a company’s shares are priced too high. By cutting the price in half, Toro will essentially make its stock more affordable for small investors, while also retaining the underlying value of the company.