Snap On Inc. Earnings: Enjoys Fifth Straight Quarter of Double-Digit Growth

S&P 500 (NYSE:SPY) component Snap On Inc. (NYSE:SNA) reported its results for the first quarter. Snap-on 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 $71 million ($1.21 per share) vs. $56.2 million (96 cents per share) in the same quarter a year earlier. This marks a rise of 26.3% from the year-earlier quarter.

Revenue: Rose 6% to $735.2 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Snap On Inc. beat the mean analyst estimate of $1.16 per share. Analysts were expecting revenue of $736.8 million.

Quoting Management: “We are pleased to begin 2012 with this encouraging first quarter performance, which we believe offers evidence that Snap-on’s value proposition continues to resonate with our expanding customer base of serious professionals performing critical tasks,” said Nick Pinchuk, Snap-on chairman and chief executive officer.

Key Stats:

The company has now seen its net income rise for three quarters in a row. In the fourth quarter of the last fiscal year, net income rose 28.3% and in the third quarter of the last fiscal year, the figure rose 45.8%.
The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 10 cents in the fourth quarter of the last fiscal year, by 15 cents in the third quarter of the last fiscal year, and by 8 cents in the second quarter of the last fiscal year.

Gross margin shrank 0.4 percentage point to 47.3%. The contraction appeared to be driven by increased costs, which rose 6.7% from the year earlier quarter while revenue rose 6%.

Revenue has increased for four consecutive quarters. Revenue increased 12.3% to $736.6 million in the fourth quarter of the last fiscal year. The figure rose 4% in the third quarter of the last fiscal year from the year earlier and climbed 12.2% in the second quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Over the past ninety days, the average estimate for the second quarter has fallen from $1.29 per share to $1.25, indicating that analysts are growing pessisimistic about the company’s performance next quarter. In the past month, the average estimate for the fiscal year has fallen from $4.99 per share to $4.96 abs.

Competitors to Watch: Q.E.P. Co., Inc., The L.S. Starrett Company, Stanley Black & Decker, Inc., and P & F Industries, Inc.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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