QUOTE AND NEWS
OilVoice  May 25  Comment 
Toro Oil Gas Ltd. TSXV TOO announces its financial and operating results for the three month period ended March 31 2016. First Quarter 2016 Financial and Operational Highlights Averaged 873 boe
New York Times  May 20  Comment 
The move by the regional government of Castile and León comes amid tensions over the annual festival in Tordesillas and other events that animal rights activists say involves cruelty.
Motley Fool  May 19  Comment 
These stocks helped lead the market lower. Find out why.
Benzinga  May 19  Comment 
The Dow fell 0.84 percent to 17,379.52, while the NASDAQ composite index declined 0.90 percent to 4,696.64. The broader Standard & Poor's 500 index dropped 0.81 percent to 2,031.14. The worst performing industries in the market today are: ...
newratings.com  May 19  Comment 
WASHINGTON (dpa-AFX) - Toro Co (TTC) announced earnings for its second quarter that advanced from last year. The company said its bottom line climbed to $105.68 million, or $1.89 per share. This was higher than $93.76 million, or $1.64 per...
SeekingAlpha  May 17  Comment 
newratings.com  May 4  Comment 
WASHINGTON (dpa-AFX) - The Toro Company (TTC) announced the company now expects revenue growth for fiscal 2016 to be flat to up two percent and net earnings per share to increase to about $3.90 to $4.00. In February, the company projected revenue...
Forbes  Apr 21  Comment 
At the 2015 Paris Climate Conference (COP21) Fetzer Vineyards’ (owned by Chile's Concha y Toro) director of regenerative development, Josh Prigge talked about his company’s commitment to carbon neutrality. To reiterate my coverage of the...




 
TOP CONTRIBUTORS

The Toro Company (TTC) makes lawn mowers, irrigation systems, snow blowers and other equipment aimed at both professional landscapers and residential homeowners. Toro distributes its products through retailers such as Wal-Mart Stores (WMT) and Home Depot (HD), independent hardware stores as well as direct sales through e-commerce.

Demand for Toro's landscaping and irrigation equipment is directly related to the development of new commercial and residential real estate. A prolonged slump due to subprime lending would likely decrease demand for Toro products, which can be expensive (many finance their purchases).

Business Overview

Toro sells lawn mowers, irrigation systems, snow blowers and other landscaping equipment to residential households as well as commercial landscapers. The company distributes its produces through retail stores such as Wal-Mart Stores (WMT) and Home Depot (HD), as well as other hardware stores and directly to consumers via an e-commerce channel.

Business Financials

Total revenues in 2009 were $1.52 billion, a significant decrease from its 2008 revenues of $1.88 billion. This 18.9% decline in net sales was due to lower demand that resulted because of the global recessionary economic climate.[1]As a result, Toro's net income declined from $120 million in 2008 to $63 million in 2009, a 47.5% decrease.

Business Segments

Toro breaks its business into two business segments: i) Professional and, ii) Residential.

Professional (63% of 2009 Revenues)

Toro's Professional segment produces and sells turf and agricultural products to government customers, rental companies, and large retailers. These customers are generally professional users engaged in creating landscapes, irrigating turf and agricultural fields, and maintaining turf, such as golf courses, sports fields, municipal properties, and residential and commercial landscapes. In 2009, this segment had $965.9 million in total sales.[2]

Residential (35% of 2009 Revenues)

The Residential segment sells products to homeowners through a variety of distribution channels, including outdoor power equipment dealers, hardware retailers, home centers, mass retailers, and over the Internet. This segment also licenses Toro's trade name to other manufacturers and retailers on certain products as a means of expanding its brand name and image. During 2009, this segment posted $532.7 million in revenues.[3]

Other (2% of 2009 Revenue)

Toro's Other segment includes sales from subsidiary distribution companies. In 2009, this segment had $24.8 million in total revenues.[4]

Trends and Forces

U.S. Housing and Commercial Construction

The demand for Toro's landscaping and irrigation equipment is directly related to the development of new commercial and residential real estate. A prolonged slump due to subprime lending would likely decrease demand for Toro products. This is especially true for Toro because many of its products are relatively expensive, requiring many customers to make purchases through third-party financing.

The U.S. Dollar Affects Demand from abroad

Toro generates about 29% of revenue outside the United States. A less valuable U.S. dollar makes Toro's American produced products more attractive on the world market. On the other hand, a strengthening Dollar makes Toro's products more expensive to international buyers, and would reduce overall sales. Toro estimates that the strengthening dollar in 2009 reduced their overall sales by $32 million.[5] However foreign currency fluctuations make sales revenues difficult to predict.

Seasonality and Weather affect earnings

Toro's sales are relatively cyclical with regards to its residential products. More specifically, sales are particularly strong in the second and third quarters of each year, as homeowners stock up on gardening and other outdoor home products. Evidence can be seen in Toro's 2009 quarterly earnings, as 59% of its 2009 revenues for residential products came during the second and third quarters.[6]

Worldwide weather patterns also affect demand for Toro products. Evidence of this is weak snow blower sales during the mild winter of 2006-2007. Conversely, worldwide water shortages are increasing demand for Toro's efficient irrigation systems (see also China's Water Scarcity).

Competition

Toro faces competition from companies including Deere & Company (DE), Black & Decker (BDK), and Honda Motor Company (HMC). In order to remain competitive, Toro must continue to devise and produce innovative high quality products that exceed consumer demands. If Toro fails to successfully innovate, these large competitors will undoubtedly use their superior resources to create products that attract new consumers and reduce Toro's market share. On the other hand, many of these large competitors are highly diversified companies that cannot bring the same focus to lawn care products as Toro.

  • MTD Products produces a wide range of lawn care product lines such as Cub Cadet and Troy-Bilt. MTD is a privately held company.
  • Black & Decker (BDK) produces a variety of lawn and garden equipment, including trimmers, lawn mowers, edgers, and pruners.
  • Makita (MKTAY) has a full line of professional power equipment, including a variety of lawn care products.



References

  1. TTC 10-K 2009 Item 7 Pg. 26
  2. TTC 10-K 2009 Item 7 Pg. 29
  3. TTC 10-K 2009 Item 7 Pg. 30
  4. TTC 10-K 2009 Item 7 Pg. 31
  5. TTC 10-K 2009 Item 7 Pg. 28
  6. TTC 10-K 2009 Item 1 Pg. 7
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