Snap-on Inc. (NYSE: SNA) reported a 35% jump in earnings for the fourth quarter helped by lower costs and expenses despite a drop in the revenue. The bottom line came in line with the analysts’ expectations while the top line missed consensus estimates.
Net income climbed 35% to $175 million and earnings soared 38% to $3.09 per share. Excluding the legal settlement in 2018 as well as the legal and tax charges in 2017, earnings increased 13% to $3.03 per share.
Net sales declined 2.3% to $952.5 million due to a 0.6% decrease in organic sales and unfavorable foreign currency translation.
Snap-on expects to make continued progress in 2019 along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena. In this pursuit, Snap-on expects capital expenditures in 2019 to be in a range of $90 million to $100 million. The effective income tax rate for the full year 2019 is predicted to be comparable to its 2018 effective tax rate of 24%.
For the fourth quarter, sales from the Commercial & Industrial Group segment rose 0.6% reflecting a 3.5% organic sales gain and acquisition-related sales, partially offset by unfavorable foreign currency translation. Snap-on Tools Group segment sales declined 0.4% as the higher sales in the US franchise operations was more than offset by unfavorable foreign currency translation.
Repair Systems & Information Group segment sales dropped 4.7% due to lower sales to OEM dealerships and reduced sales of undercar equipment as well as unfavorable foreign currency translation.
Despite near-term challenges in various environments, the company continues to see clear progress on a number of its runways for growth and improvement including the Commercial & Industrial Group extending its penetration of critical industries, the building of its activity in emerging markets like India, and the continuing recovery in its US van channel.
Shares of Snap-on ended Wednesday’s regular session down 0.22% at $165.59 on the NYSE. The stock has fallen 0.89% in the past year while it has risen over 4% in the past three months.