Kenosha-based Snap-on Inc. reported a 15 percent increase in earnings during the first quarter, even as its organic revenue was up less than 1 percent.
Nick Pinchuk, Snap-on chairman and chief executive officer, attributed the improved earnings to the company’s “ongoing commitment to our Snap-on Value Creation Processes and the benefits for our corporation of the new tax legislation in the United States.”
Net income increased from $141.6 million to $163 million and earnings improved from $2.39 to $2.82 per diluted share.
Net sales for the maker of tools, diagnostic and repair equipment increased by $48.4 million or 5.5 percent to $935.5 million. Organic sales were up $7.2 million or 0.8 percent as most of the gain was driven by a $26.9 million favorable foreign currency translation and $14.3 million from acquisitions.
“We are encouraged with our first quarter 2018 results, which were achieved despite continuing headwinds in the Snap-on Tools Group,” Pinchuk said. “Net sales growth in both the Commercial and Industrial Group and the Repair Systems and Information Group provides ongoing validation of the fundamental strength of Snap-on’s value proposition of making work easier for serious professionals and demonstrates continued progress along our defined runways for coherent growth.”
The commercial and industrial segment increased revenue by $32.9 million to $331.6 million, including a 1.9 percent organic increase. The gains included higher sales to customers in critical industries along with improvements in Europe and Asia. Lower sales of power tools offset the increase.
The repair systems and information group boosted revenue by $18.2 million to $337 million, including a 2.6 percent organic increase. Sales of undercar equipment were flat, but the company did have higher sales of diagnostic and repair information products to independent shop owners as well as higher sales to OEMs.
The tools segment had the worst quarter of the company’s three groups. Sales were down $4.7 million to $404.7 million. Organically, sales were down $11.4 million or 2.7 percent as U.S. franchise operations struggled, offsetting gains internationally.
