Snap-On (NYSE:SNA) Issues Quarterly Earnings Results

Snap-On (NYSE:SNA) released its quarterly earnings data on Thursday. The company reported $4.64 earnings per share (EPS) for the quarter, missing the consensus estimate of $4.93 by ($0.29), Zacks reports. The company had revenue of $1.18 billion during the quarter, compared to analysts’ expectations of $1.24 billion. Snap-On had a net margin of 21.25% and a return on equity of 17.07%. Snap-On’s quarterly revenue was down .6% on a year-over-year basis. During the same period last year, the firm earned $4.71 earnings per share.

Here are the key takeaways from Snap-On’s conference call:

• Organic sales declined 2.8% and adjusted operating margin fell 50 basis points, while EPS decreased to $4.64 from $4.71 excluding the prior-year legal benefit.
• The Snap-on Tools Group reported a 7% organic sales decline as franchisees reduced van inventory to build cash cushions against sharply higher diesel prices, driving operating margin down to 18% from 21.7%.
• Commercial & Industrial delivered a record quarter, with organic sales up 7.4%, operating income up 29.9%, and operating margin expanding 290 basis points to 18.5% on strong military, industrial, natural resources, and precision-torque demand.
• Repair Systems & Information organic sales fell 5.5%, primarily because OEM dealerships reduced project-related spending amid delayed or fewer new-vehicle launches, although adjusted margins remained broadly stable and gross margin improved.
• Management said the core vehicle-repair market remains fundamentally strong, technician demand and spending are stable, diesel-price turbulence appears to have flattened, and Snap-on continues investing in products, brands, and people while maintaining a robust 51% consolidated gross margin.

Snap-On Stock Down 5.3%

SNA stock traded down $19.41 during trading on Thursday, hitting $349.50. 388,762 shares of the company’s stock traded hands, compared to its average volume of 350,562. The firm has a market capitalization of $18.08 billion, a P/E ratio of 17.86, a PEG ratio of 2.43 and a beta of 0.71. Snap-On has a 1 year low of $320.80 and a 1 year high of $423.02. The company has a quick ratio of 2.64, a current ratio of 3.43 and a debt-to-equity ratio of 0.15. The business has a fifty day simple moving average of $377.17 and a two-hundred day simple moving average of $384.62.

Snap-On Announces Dividend

The firm also recently disclosed a quarterly dividend, which was paid on Thursday, September 10th. Stockholders of record on Wednesday, August 19th were paid a dividend of $2.44 per share. The ex-dividend date was Wednesday, August 19th. This represents a $9.76 dividend on an annualized basis and a dividend yield of 2.8%. Snap-On’s dividend payout ratio (DPR) is currently 49.77%.

Insider Buying and Selling

In related news, CFO Aldo Pagliari sold 5,531 shares of the company’s stock in a transaction on Thursday, August 13th. The stock was sold at an average price of $404.25, for a total transaction of $2,235,906.75. Following the completion of the sale, the chief financial officer directly owned 120,644 shares in the company, valued at $48,770,337. This represents a 4.38% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Nicholas T. Pinchuk sold 22,889 shares of the firm’s stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $399.69, for a total value of $9,148,504.41. Following the sale, the chief executive officer directly owned 867,779 shares in the company, valued at approximately $346,842,588.51. The trade was a 2.57% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 38,331 shares of company stock worth $15,525,200 over the last quarter. Insiders own 3.80% of the company’s stock.

Analyst Upgrades and Downgrades

A number of brokerages have recently commented on SNA. Roth Capital reaffirmed a “buy” rating and set a $461.00 target price (up from $409.00) on shares of Snap-On in a research report on Friday, July 24th. Robert W. Baird set a $415.00 price target on Snap-On in a report on Friday, July 24th. Barclays lowered their price target on Snap-On from $450.00 to $435.00 and set an “overweight” rating for the company in a report on Tuesday, October 6th. Tigress Financial increased their price objective on Snap-On from $445.00 to $485.00 and gave the stock a “buy” rating in a research note on Friday, July 31st. Finally, Weiss Ratings restated a “buy (b)” rating on shares of Snap-On in a report on Thursday, October 15th. Four equities research analysts have rated the stock with a Buy rating and one has assigned a Hold rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of $449.00.

Snap-On Company Profile

Snap-on Incorporated is a manufacturer and distributor of professional tools, equipment, diagnostics, and related services. Its offerings include hand and power tools, tool storage, vehicle repair equipment, diagnostic systems, and repair information and management software. The company serves professional users who work in automotive repair, heavy-duty transportation, aviation, agriculture, construction, industrial production, government, and other technical fields.

Snap-on markets products under the Snap-on brand and other brands, including Blue-Point, Bahco, and Williams.