The Wall Street Journal - 16.08.2019

THE WALL STREET JOURNAL. Friday, August 16, 2019 |B5

BUSINESS NEWS

adjusted earnings of 20 cents

to 40 cents a share for the

year ending in June 2020,

down from a previous forecast

of about $1.30 a share.

The company trimmed its

full-year sales forecast to $1.91

billion to $1.97 billion from its

earlier guidance of $2.01 bil-

lion.

Analysts polled by FactSet,

on average, were expecting an

adjusted profit of $1.22 a

share on sales of $1.99 billion

for fiscal 2020.

Briggs & Stratton said its

board cut the quarterly divi-

dend by 64% to 5 cents amid

plans to reduce debt and in-

vest in new products and tech-

nologies.

“Going forward, we will

continue to direct funds in

those areas that deliver the

highest risk-adjusted return on

investment,” said Todd Teske,

chairman and chief executive,

adding that the reduced divi-

dend “sets a payout that we

believe is sustainable and can

grow over time.”

Briggs & Stratton said sales

of residential walk-behind

mowers, where the vast ma-

jority of its small vertical-

shaft engines are used, have

been hurt by a difficult hous-

ing market, driven by the lack

of affordable single-family

homes in the U.S.

The company said it would

close its plant in Murray, Ky.,

by the fall of 2020 as it con-

solidates production of the en-

gines into its Poplar Bluff, Mo.,

facility, adding that it will of-

fer employees at the Murray

site the chance to relocate to

other facilities.

It said it would incur $30

million to $35 million of pre-

tax expenses related to the

closure, including roughly $15

million to $17.5 million for

noncash asset impairments.

The company said it expects

pretax savings of up to $14

million a year.

Shares ofBriggs & Strat-

ton Corp. plummeted more

than 40% on Thursday after

the gasoline-engine maker

posted a surprise quarterly

loss and slashed its dividend

and earnings guidance.

Briggs & Stratton also said

it would consolidate produc-

tion of small vertical-shaft en-

gines, resulting in the closure

of a Kentucky plant that em-

ploys about 630 people.

Briggs & Stratton reported

a wider loss of $18.5 million,

or 45 cents a share, for its fis-

cal fourth quarter, compared

with $11.8 million, or 29 cents

a share, a year earlier.

Excluding items, the com-

pany posted an adjusted loss

of 36 cents a share for the

quarter. Analysts polled by

FactSet were expecting ad-

justed earnings of 45 cents a

share.

Sales fell 5.9% to $472 mil-

lion, missing Wall Street’s ex-

pectations of a rise to $519.9

million.

Shares of the Milwaukee-

based company closed down

44.5% Thursday at $4.59.

Briggs & Stratton said the

sales decline reflects unusually

wet spring weather in North

America, along with near-term

market disruptions brought

about by channel partner tran-

sitions. It had previously

warned that the bankruptcy of

Sears Holdings Corp. would

weigh on sales.

Briggs & Stratton said it

has encountered inefficiencies

as it implements a business

optimization program.

The company cut its earn-

ings guidance for the current

fiscal year amid a lower sales

outlook, a scale-back of pro-

duction in a bid to reduce in-

ventories and the continuation

of some inefficiencies into the

first half of the year. Briggs &

Stratton said it now expects

BYCOLINKELLAHER

Briggs & Stratton

Shares Fall After

Loss, Outlook Cut

autonomous trucks in its

freight network. “Our work

with TuSimple has no end

date in sight,” Mr. Lewis said.

The investment deal and

partnership come as postal

and freight companies ratchet

up experimentation in the

self-driving sector, which

touts its ability to cut costs

and boost logistics efficiency.

Competition is heating up

between logistics incumbents

and Amazon.com Inc. as the e-

commerce company builds its

own delivery network. Last

week, FedEx Corp. said it was

ending its contract to deliver

Amazon packages through its

ground network.

For TuSimple, the UPS in-

vestment is an extension of a

$95 million Series D funding

round in February that valued

the company at $1.095 billion.

This is the first time UPS has

invested in TuSimple.

The U.S. Postal Service this

year joined with TuSimple to

test self-driving trucks on a

more-than-1,000-mile mail run

between Phoenix and Dallas.

The two-week pilot was the

postal service’s first use of the

technology for long hauls.

TuSimple said it is scheduled

to discuss future collaboration

with USPS next week.

Some delivery companies

are testing other technology.

FedEx, for instance, joined last

year with Volvo Trucks North

America to test platooning

technology, which allows

trucks to follow one another

closely to save fuel.

Founded in 2015, TuSimple

is developing technology that

would allow shipping compa-

nies to operate self-driving

class 8 tractor-trailers—those

that exceed 33,000 pounds

and typically have three or

more axles. The company, with

offices in the U.S. and China,

uses cameras mounted on

truck cabs.

TuSimple’s Series D round

in February was led by Chi-

nese firm Sina Corp., with

Hong Kong-based investment

firm Composite Capital Man-

agement also participating.

TuSimple’s total capital raised

so far is $178 million.

TuSimple is among the

handful of well-funded start-

ups aiming to automate long-

haul trucking. While personal

vehicles have won much of the

self-driving industry’s focus,

startups such as Embark

TrucksInc.,Starsky Robotics

and truck-platooning company

Peloton TechnologyInc. are

drawing interest for their po-

tential to cut costs.

Dan Hoffer, managing di-

rector ofAutotech Ventures

LLC, a transportation-focused

venture firm, said ballooning

valuations in the sector have

led his firm to fund autono-

mous truck startups that serve

construction and mining sites.

United Parcel Service

Inc.’s venture-capital division,

UPS Ventures, has acquired a

minority stake in self-driving

trucking startup TuSimple

Inc., signaling the delivery

company’s continued push

into autonomous driving.

In addition, UPS will ex-

pand a partnership it began

with TuSimple in March for

the startup to carry truckloads

of goods between Phoenix and

Tucson, Ariz., said UPS Ven-

tures Managing Partner Todd

Lewis.

TuSimple’s trucks operate

autonomously with a human

operator aboard to take over if

needed.

The companies are looking

to add more routes to run

self-driving tests in the West-

ern U.S., said Chuck Price,

chief product officer of

TuSimple.

Mr. Lewis said the collabo-

ration with TuSimple is in-

tended to help UPS figure out

how it could implement fully

BYMARCVARTABEDIAN

UPS Invests in Self-Driving Trucks

The delivery company is collaborating with TuSimple Inc., whose trucks operate autonomously with a human operator aboard.

TUSIMPLE/REUTERS

Competition is

heating up between

logistics incumbents

and Amazon.com.

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