FOREST CITY, Iowa – Motor home and RV manufacturer Winnebago Industries Inc. (WGO) said Thursday its third-quarter earnings dipped slightly from the year-ago period due to lower motor home deliveries, reduced factory production and a higher level of discounts.
But the results still beat Wall Street expectations, and Winnebago shares rose $1.68, or 5 percent, to $35.19 on the New York Stock Exchange (search). The shares have traded in a 52-week range of $28.32 to $40.64.
Net income slipped to $17.6 million, or 52 cents per share, from $17.7 million, or 51 cents per share, a year ago. The year-ago period included a legal settlement charge of $4.6 million, or 13 cents per share. Per-share results in the latest period are based on fewer common shares outstanding.
Revenue fell 17.8 percent to $255 million from $310.2 million last year.
Winnebago's profit results beat estimates from analysts surveyed by Thomson Financial, who were looking for quarterly earnings of 49 cents per share. Sales, however, were expected to reach $271.3 million.
"Third-quarter results were negatively impacted by lower motor home deliveries, as well as lower production efficiencies caused by reduced factory production," said Winnebago Chairman and CEO Bruce Hertzke. "Motor home deliveries for the quarter were lower due to lower retail demand and an industry-wide oversupply of motor homes. As a result, we reduced our production level during the third quarter to better correspond to demand."
The company also said a higher level of discounts was needed to clear out 2005 motor homes to make way for the new model year.
Winnebago said its sales order backlog was 1,523 units at May 28, down sharply from 2,444 units a year ago. "As a result of a weaker backlog and industry-wide softness in the motor home market, we will continue to adjust our factory schedule as necessary to correspond to the demand for our products," Hertzke added.
The company also said its board raised Winnebago's quarterly cash dividend by 29 percent to 9 cents per share, payable on Oct. 3 to shareholders of record at Sept. 2. In addition, the board authorized the repurchase of up to $30 million of the company's common shares.