Brunswick Corp., citing a significant decline in retail demand, is curbing production and lowering its expectations for the remainder of the year.
The Lake Forest, Ill.-based boatbuilder projects its second-quarter sales will rise 1 percent, to $1.55 billion. The company says it expects second-quarter earnings will be 93 to 94 cents a share. This falls in line with the company's previously announced estimate of 90 to 97 cents.
"Our second-quarter results are in line with our expectations," said Brunswick chairman and CEO Dustan E. McCoy, in a statement. "Throughout the key second-quarter selling season for 2006 model year marine products, however, we have experienced significant declines in retail demand, which has resulted in an increase in pipeline inventories."
As a result, the company says it will further reduce production levels, leading to a lower earnings estimate for the second half of the year.
"Although this will result in reduced margins, we believe that managing pipeline inventories is critical in a cyclical, as well as a seasonal, industry," McCoy said.
The company, which also makes fitness equipment and bowling and billiards products, projects earnings from continuing operations of $2.40 to $2.55 a share for the full year, below its prior forecast for an equivalent profit of $3 to $3.15 a share.
Brunswick shares were $29.67 during trading -- down $2.16.