March 11, 2008 / 2:54 PM / in 10 years

Dorel profit rises, narrowly misses expectations

TORONTO (Reuters) - Dorel Industries Inc DIIb.TO reported a 3.1 percent rise in fourth-quarter profit on Tuesday, helped by stronger sales, but restructuring costs contributed to the Canadian consumer products company missing analysts’ expectations.

Dorel, which makes products for children, home furnishing and recreation, said net earnings grew to $22.3 million or 67 cents per share, from $21.7 million, or 66 cents per share, in the same period last year.

The mean estimate from analysts was for a profit of 75 cents a share before exceptions, according to Reuters Estimates.

Excluding restructuring costs for its European operations and to shut its Ameriwood furniture factory in Michigan, Dorel said adjusted profit was $24 million, or 72 cents a share.

That compares with adjusted earnings of $24.4 million, or 74 cents a share, in the year-prior period ended December 30.

For the fourth quarter, Dorel said the combined after-tax impact of its restructuring initiatives totaled $1.6 million or 5 cents per diluted share.

The Montreal-based company, whose products range from Safety 1st children’s equipment to bicycles, said revenue was up 2.4 percent at $458.9 million.

Sales in its core juvenile segment climbed 9.9 percent to $248 million on increased European sales.

Revenue for recreation and leisure product sales rose 11.6 percent to $85.8 million. Dorel said last month that it was buying Cannondale Bicycle for up to $200 million to push into the high-end cycling market.

Home furnishing revenue dropped 13.9 percent to $145.3 million, largely due to the slowdown in the U.S. housing market.

Dorel did not give an outlook for 2008, saying the current economic situation, particularly in the United States, made it difficult to predict consumer trends. However, the company said it had not witnessed any slowdown during the first two months of 2008.

The company designs, manufactures and markets a range of products under such brands as Cosco, Eddie Bauer, and Disney Baby.

Dorel’s class B shares were little changed, down 0.03 percent on the Toronto Stock Exchange after the results were issued. So far this year, the stock has gained about 0.7 percent.

($1=$0.99 Canadian)

Reporting by John McCrank, editing by Mario Di Simine

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