Snap-on Inc. has announced operating results for the first quarter of 2019. The company reported net sales of $921.7 million in the quarter decreased $13.8 million, or 1.5%, from 2018 levels – reflecting a $12.3 million, or 1.4%, organic sales increase, more than offset by $26.1 million of unfavorable foreign currency translation.
Operating earnings before financial services were $187.4 million for the quarter, or 20.3% of sales, including an $11.6 million benefit from the settlement of a patent-related litigation matter that was being appealed and $5.7 million of unfavorable foreign currency effects. This compared to $177.7 million, or 19% of sales, last year. Excluding the legal settlement, operating earnings before financial services, as adjusted, in the first quarter of 2019 were $175.8 million, or 19.1% of sales.
Reported net earnings in the first quarter of 2019 were $177.9 million, or $3.16 per diluted share, compared to $163 million, or $2.82 per diluted share, a year ago. Excluding the legal settlement in 2019, net debt items and tax charges in 2018, net earnings, as adjusted, were $169.2 million, or $3.01 per diluted share, in 2019, compared to $161.5 million, or $2.79 per diluted share, last year.
“We are encouraged by our first-quarter 2019 results, which included a continuing recovery in our U.S. franchise network, with a mid-single-digit sales gain in that operation,” said Nick Pinchuk, Snap-on chairman and CEO. “Our advancements in the quarter, despite uncertainty in several geographies, demonstrated progress along our runways for growth and reflect the strength of Snap-on’s value proposition of making work easier for serious professionals in both critical industries and vehicle repair. At the same time, year-over-year growth in earnings per diluted share reflects the ongoing effectiveness of our Snap-on Value Creation Processes and the opportunities available in our end markets. Finally, our progress would not have been possible without the dedication and capability of our franchisees and associates, and I thank them for their commitment and their contributions.”
Snap-on said it expects to make continued progress in 2019 along its defined runways for coherent growth, leveraging capabilities already demonstrated in the automotive repair arena and developing and expanding its professional customer base, not only in automotive repair, but in adjacent markets, additional geographies and other areas, including extending in critical industries, where the cost and penalties for failure can be high. In pursuit of these initiatives, Snap-on expects that capital expenditures in 2019 will be in a range of $90 million to $100 million, of which $20.2 million was incurred in the first quarter.