Toro announces improved operating outlook before charges for the first quarter and full year; announces the effect of a change in accounting principle
The Toro Company (NYSE:TTC) announced that it expects to be profitable during the first quarter of fiscal 2002, excluding one time charges, exceeding current analyst expectations. The company had previously said it expected a loss of 20 cents per share to breakeven for the first quarter. This improvement is due to improved expectations largely from Toro’s residential segment related to the new line of moderately priced walk power mowers for The Home Depot and dealers, increased snow shipments and expense timing. Toro said its full year EPS should improve by 2 to 3 percent over current analysts’ expectations, before one time charges.
Kendrick B. Melrose, chairman and chief executive of Toro said, "We are pleased with the developing strength of the first quarter. The previously announced walk power mower initiative with The Home Depot and dealers is off to a strong start and retail movement is already occurring in some markets." Melrose added, " The late winter snowstorms have stimulated snow sales in certain parts of the country. Our 5 by Five initiative, combined with the timing of certain expenditures, has also improved anticipated profitability for the quarter. While the first quarter operating results appear to be better than expected, we are still approaching the year with caution due to the economic environments worldwide."
Toro had previously announced that it would adopt the new goodwill accounting rules issued by The Financial Accounting Standard Board for the first quarter of fiscal 2002. These rules relate to the treatment of goodwill and other intangible assets and will require, among other things, that such intangible assets with indefinite useful lives no longer be amortized. The impact of this change is expected to improve Toro's earnings for the fiscal 2002 year by approximately $.61 to $.64 per dilutive share. Moreover, the rules require that goodwill be reviewed periodically for potential impairment under a new valuation approach.