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Dorel Industries Q1 profit slumps, misses views

Published: 12:59 11 May 2012 EDT

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Dorel Industries (TSE:DII.B) reported fiscal first-quarter earnings dropped Friday, lagging behind analyst estimates, and also said it remains cautious about its outlook due to uncertain economic conditions.

Net income slumped to $29.2 million, 91 cents per fully diluted share, on $621.1 million in revenue for the January-March period.

The latest quarter compared with a profit of $31.2 million, or 94 cents per fully diluted share, on $607.8 million in sales, a year earlier.

On average, analysts had expected per-share earnings of $1.08, on $636 million in sales, according to Bloomberg.

The Montreal-based company, which sells Mongoose bikes and Cosco strollers and high chairs, said its juvenile segment recorded flat sales of $269 million.  Gross margins in the unit rose to 27.6 percent, up from 26.6 percent last year.

At its recreational and leisure division, revenue grew 10 percent to $220 million from $200 million a year earlier. The unit’s gross margin rose to 26.5 percent from 25.4 percent.

Sales from its home furnishings business decreased five percent to $130.7 million, as operating profit fell to $5.8 million from $7.8 million a year earlier.

The company's juvenile brands include Safety 1st, Quinny, Cosco and Maxi-Cosi, while it sells bikes under the Cannondale, Schwinn, GT, Mongoose and IronHorse marks. Dorel has some 5,000 employees in 22 countries worldwide.

Dorel’s board also declared a quarterly dividend of 15 cents per Class A voting share, which will be paid to shareholders on June 8.

Looking ahead, the company said that due to uncertain economic conditions and volatility in currencies, it is cautious about its juvenile segment’s outlook.

Shares dropped 6.56 percent, falling to $26.91 on the Toronto Stock Exchange on Friday.

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