KENOSHA, Wis. (April 22, 2009) — Snap-on Inc.'s net earnings plummeted 38.5 percent to $34.8 million as net sales fell 20.6 percent to $572.6 million in the first quarter ended April 4.
The tool maker's operating earnings fell 31 percent to $64.3 million in the quarter, compared with the year ago period.
“Continuing difficult economic conditions further weakened customer demand in the first quarter,” said Nick Pinchuk, Snap-on president and CEO. “In light of these challenges we increased our focus on rapid continuous improvement, sourcing and other cost reduction initiatives. At the same time, we moved forward during the quarter with our strategic growth investments and with our most important value creation initiatives, such as product innovation.”
The company said the depressed global economy impacted sales of big ticket items, such as tool storage and undercar equipment. It doesn't expect the situation to change in the near term and predicts a continued sales and earnings slump for the second quarter.
Snap-on said it will pursue several planned growth investments, including expansion of its manufacturing capacity in China and Eastern Europe. Capital expenditures for 2009 are expected to total $60 million to $70 million.