Brunswick shares tumble on downgrade

Posted April 1, 2010 at 4:16 p.m.

Associated Press | Shares of Brunswick Corp. tumbled on Thursday
after an analyst downgraded shares of the boat maker, saying the
company still has earnings potential, but it faces soft retail sales in
the first quarter.

Raymond James analyst Joseph D. Hovorka cut his rating on the company
to “Market Perform” from “Outperform.” Shares of Brunswick fell 50
cents, or 3.1 percent, to $15.47 in afternoon trading Thursday.

Hovorka said recent checks of boat registration data in Florida, the nation’s biggest seller of boats, and other top markets of Texas and North Carolina show the reversal of a yearlong strengthening trend in the industry.

He said registration numbers for December were up 0.4 percent, but the trend declined in January and February, with a 14.2 percent drop in that month alone.

The analyst said the company’s shares have been rising as investors like the positive sales trends, improved dealer inventory levels and better balance sheet for the company, which is based in Lake Forest.

He said the company’s earnings power “remains significant” because the company’s costs are improving. But he said shares could be volatile because of timing of the company’s peak earnings.

“We believe a reversal of the strengthening trend in retail may cause investors to reassess the timing of earnings recovery,” he said


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