March 11, 2009 / 3:22 PM / 9 years ago

UPDATE 3-Dorel profit drops but tops estimates

* EPS $0.57 vs $0.67

* Profit tops the average analyst estimate

* Revenue rises 4.5 pct to $479.9 million

* Shares up 4.3 percent at C$16.54 (In U.S. dollars. Recasts to add closing share price, profit forecast)

TORONTO, March 11 (Reuters) - Dorel Industries (DIIb.TO) said on Wednesday quarterly earnings fell, in part on lower sales of children’s furniture, but results came in above estimates and its shares rose more than 4 percent.

The Montreal-based company said it expects to be less profitable in 2009 than last year, mainly because of the impact of a rising U.S. dollar, the currency in which it reports its results.

But it said many of its products are relatively immune to recession and said it expected to benefit from a shift toward lower-priced goods.

“Going into 2009, we expect continued decent point of sale for our products,” CEO Martin Schwartz said in a telephone interview.

“We do not anticipate that 2009 will be as profitable as 2008, but nor do we expect it to be anywhere nearly as negative as current market conditions suggest,” Schwartz said in a release.

The company said many of its products, which include ready-to-assemble furniture, Safety 1st children’s products, and bicycles, are “recession resilient.”

As a result, Dorel said it expected lower and mid-priced products would account for a greater percentage of its sales. That is likely to pressure profit margins but increase its market share.

Earnings dropped to $19.2 million, or 57 cents a share, in its fourth quarter ended Dec. 30, down from $22.3 million, or 67 cents, in the year-earlier quarter.

Revenue rose 4.6 pct to C$479.9 million.

Analysts, on average, had expected earnings of 55 cents a share and revenue of $468.1 million, according to Reuters Estimates.

The shares, which have dropped more than 40 percent in the past year, rose 4.35 percent on Wednesday to C$16.54.

Sales in its juvenile division fell 11.2 percent to $228.7 million, and sales in the recreation and leisure product division were up 79.2 percent at $153.8 million. Home furnishing revenue fell 15.5 percent to $97.4 million.

$1=$1.28 Canadian Reporting by Scott Anderson; Editing by Frank McGurty and Janet Guttsman

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