Toro (NYSE: TTC), maker of lawn and snow-throwing equipment and competitor of Deere (NYSE: DE) and Black and Decker (NYSE: BDK), seems to be hitting a rough patch because of the weakened economy. The top line decreased to about $639 million in net sales for the second quarter. Earnings per share skidded almost 10% to $1.60. That was good enough to beat expectations by a penny, as Briefing.com pointed out, but make no mistake about it this was not an impressive quarter.

The company also sported negative operational cash flow. Although Toro used less cash, it still needed $111 million to keep corporate activities going. A look at the most recent 10-K shows that Toro has been generating positive annual cash flows over the last few years, so I wouldn't necessarily worry about this cash-flow statement for now, as it most likely will improve as the year goes on. As a matter of fact, management said in the earnings release that it was confident about the cash flow and intended to repurchase more shares.

But Toro doesn't expect much in the way of growth for the coming year. Guidance calls for flat top-line growth in fiscal 2008 and for net earnings per share to either be flat or to fall 5%. Not an inspirational forecast, let me tell you. With the stock pretty near a 52-week low and with the dividend yield not as high as I'd like, I don't see a reason why an investor should be fooling with Toro right now.

Yes, I do see that management seems confident in the future, and who knows, you could be getting a value here since this is a powerful brand, but I think the shares might be pressured in the coming months if energy costs continue to rise and inflation remains a concern (interestingly enough, Toro shares did rebound in the after-hours session on Thursday after being sold throughout the day in regular trading). No, this isn't the end of Toro, but for me, I'm not inclined to put money to work here until I see at least some strength in the stock.

Disclosure: I don't own shares in any company mentioned; positions can change at any time.