Snap-on 4Q Net Surges 58% On Higher Sales; Tops Estimates

Snap-on Inc.'s (SNA) fourth-quarter earnings surged 58% as the toolmaker saw demand improve across all business segments, helping results top analysts' expectations.

Snap-on controls about 55% of the professional tool market, where it competes with Stanley Black & Decker Inc.'s (SWK) Mac Tools unit and Danaher Corp.'s (DHR) Matco, according to Morningstar estimates. Snap-on gets more than half its sales from the U.S. and from the auto sector but has sought growth in emerging markets and higher-margin segments such as power generation and aerospace.

The company reported a profit of $57.9 million, or 99 cents a share, up from $36.6 million, or 63 cents a share, a year earlier. The latest results included a 6-cent tax benefit. Net sales increased 13% to $696.9 million.

Analysts polled by Thomson Reuters most recently forecast earnings of 90 cents a share on revenue of $685.5 million.

Prior cost-cutting also has boosted margins in recent quarters, although in the fourth quarter, gross margin slid to 45.7% from 46%.

The commercial and industrial segment, its largest by revenue, saw sales rise 15% due to higher sales across all units, including those serving critical industries and emerging markets. The tools group posted a sales growth of 13%, driven by a strong performance in the U.S.

Revenue from the financial-services business grew to $21.5 million from $6.7 million.

Snap-on shares closed Wednesday at $57.52 and were inactive premarket.

-By John Kell and Lee Roberts, Dow Jones Newswires; 212-416-2480; [e-mail]