Tags: Snap-on | growth | rates | SNA

Snap-on Sustains Growth Rates

By    |   Thursday, 01 Dec 2011 06:22 PM

Equipment manufacturer and distributor Snap-on (SNA) saw revenues and profits drop significantly during the 2009 economic recession. Since that time, the company has been sustaining growth rates through its unique multi-channel sales programs.

Snap-on designs, manufactures and distributes tools and diagnostic equipment primarily for the automotive sector but is expanding into related fields such as aviation. The company divides its business into the commercial and industrial group (selling products outside the traditional automotive sector), the repair systems and information group (selling diagnostic equipment to dealerships and repair shops), the Snap-on Tools Group (which sells through independent franchisees using the familiar Snap-on trucks), and financial services (which provides financing for the franchisee system).

For the first nine months of 2011, Snap-on generated revenues of $2.12 billion, up 10 percent from $1.92 billion for the same period of 2010. Net income for the period was $3.44 per share, up 56 percent from $2.20.

For the full year, the earnings estimate is $4.38 per share compared to $3.19 earned in 2010. The consensus estimate for 2012 is $4.84 per share. For comparison, Snap-on earned $4.07 in 2009 before earnings dropped by 40 percent due to the recession.

Growth in China

The company has been making an extra effort to increase sales in China. Diagnostic and repair equipment is being specifically designed for use with vehicles unique to the Asian markets.

As of the 2011 third quarter, the company was building a new research and engineering center in China. Another growth area is aviation and aerospace sales. To promote sales in this sector, Snap-on has put together large trucks filled with the company's most advanced equipment. These trucks take the equipment direct to end users so that they can try out the company's products.

With a $3 billion market cap, Snap-on falls into the lower mid-cap range and is not widely followed by Wall Street analysts. Currently only three analysts are making quarterly earnings predictions.

The company next reports on Feb. 2.

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Equipment manufacturer and distributor Snap-on (SNA) saw revenues and profits drop significantly during the 2009 economic recession. Since that time, the company has been sustaining growth rates through its unique multi-channel sales programs. Snap-on designs, manufactures...
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2011-22-01
Thursday, 01 Dec 2011 06:22 PM
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