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Dorel Industries profit, revenue in fourth quarter better than expected

Dorel CEO Martin Schwartz says that despite a slow start to the year, the company expects to meet its targets for 2013.

John Morstad/The Globe and Mail

Dorel Industries Inc. stock jumped to its highest level in several years on Wednesday after the consumer goods company issued a generally positive outlook and fourth-quarter results that beat estimates expectations.

The maker of child car seats, furniture and bicycles says it earned $29.1-million (U.S.) in the fourth quarter, up 6.4 per cent year-to-year. The profit amounted to 91 cents per diluted share, which was 21 cents above the consensus estimate.

The company's president also said Dorel expects growth to continue this year, although 2013 has gotten off to a slower start than last year.

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Traders responded by bidding up Dorel shares as high as $42.10 (Canadian) on the Toronto Stock Exchange, the highest since June 2005. Dorel shares later gave up some of the gains to trade at $41.40, up $3.50 or 9 per cent and still above the previous 52-week high of $40.50.

Dorel's revenue was also stronger than analysts expected, rising 10.9 per cent year-to-year to $622.6-million (U.S.) – about $30-million above a consensus revenue estimate compiled by Thomson Reuters.

In the fourth quarter of 2011, Dorel reported $561.6-million of revenue, $27.4-million of net income and 85 cents per share of diluted earnings.

"We made substantial progress through 2012, particularly in light of the lingering tough economy," Dorel president and CEO Martin Schwartz said in a statement.

"For the 2013 year we expect to achieve overall growth in both revenues and net income through both market expansion and by continuing to invest in new products and brand support."

However, he said this year has started slower than last year.

He said both Dorel's juvenile segment and its recreational/leisure segment showed growth during the fourth quarter.

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The juvenile segment improved its earnings from the United States and Europe despite a fragile financial environment in those regions, while stressing the importance of its increased presence in Latin America.

"Dorel Chile had an outstanding fourth quarter, buoyed by strong retail sales at our 70 stores. Brazil is recovering from a difficult year in 2011 and Dorel Colombia, with its first quarter as part of the company, also delivered sound results," Mr. Schwartz said in a statement.

In the recreational/leisure segment, he said, the fourth-quarter revenue was boosted by Dorel's ability to ship more product and strong sales of electric ride-on toy vehicles.

For the full year Dorel, which reports in U.S. currency, had $2.49-billion of revenue, up 5.3 per cent from $2.36-billion in 2011. It also had $108.6-million of net income, or $3.39 per diluted share, up from $104.59-million or $3.21 per share in 2011.

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