Snap-On Earnings Cheat Sheet: Double-Digit Growth Beats Estimates

S&P 500 (NYSE:SPY) component Snap On Inc. (NYSE:SNA) reported its results for the first quarter. Snap-on Inc. is a global innovator, manufacturer and marketer of tools, diagnostics, equipment, software and service solutions.

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Snap On Earnings Cheat Sheet for the First Quarter

Results: Net income for Snap On Inc. rose to $58 million (96 cents/share) vs. $36.8 million (63 cents/share) YoY. A rise of 57.6% from the year earlier quarter.

Revenue: Rose 14% to $719.5 million YoY.

Actual vs. Wall St. Expectations: SNA (NYSE:SNA) beat the mean analyst estimate of 92 cents/share. Estimates ranged from 83 cents per share to $1 per share.

Quoting Management: “We are very encouraged by Snap-on’s first quarter performance,” said Nick Pinchuk, Snap-on chairman and chief executive officer, “and by the continued strengthening of our strategic position along each of our runways for growth. We believe the progress being made in enhancing the franchise network, expanding in the vehicle repair garage, extending in critical industries and building in emerging markets, coupled with our ongoing commitment to the Snap-on Value Creation Processes and the ramp-up of our on-book finance portfolio, positions Snap-on quite strongly for continued growth going forward.”

Key Stats: Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 4.1 percentage points to 54.1% from the year earlier quarter. Over that span, margins have grown on average 1.8 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 58.2% and in the third quarter of the last fiscal year, the figure rose 83.1%.

Over the last five quarters, revenue has increased 11.4% on average year over year. The biggest increase came in the fourth quarter of the last fiscal year, when revenue rose 15% from the year earlier quarter.

Competitors to Watch: Danaher Corp. (NYSE:DHR), The Home Depot, Inc. (NYSE:HD), Lowe’s (NYSE:LOW) and Stanley Black & Decker, Inc. (NYSE:SWK).

Today’s Performance: Shares of SNA (NYSE:SNA) are trading at $61.01 as of April 21, 2011 at 8:40 AM ET, unchanged from the previous close.


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