Arctic Cat Inc.
) posted a 5.6% decline in earnings per share to $1.70 in the
second quarter of fiscal 2014 (ended Sep 30, 2013) compared with
$1.80 cents earned in the corresponding quarter last year.
Reported earnings also missed the Zacks Consensus Estimate by 25
cents. Net income declined 6.4% to $23.4 million from $25 million
in the year-ago quarter.
Revenues for the quarter ended Sep 30, 2013 increased 4.1% year
over year to $238.5 million, missing the Zacks Consensus Estimate
of $253 million. The year-over-year improvement was attributable
to better performance by the Wildcat and Prowler HDX
side-by-sides and higher sales in the snowmobiles business,
partially offset by decline in ATV sales in North America and
Gross profit decreased 3.7% to $61.7 million or 25.9% of sales
from $64 million or 28% of sales in the year-ago quarter. The
year-over-year decline was due to product mix, adverse impact of
Canadian currency and increased sales incentives due to higher
retail sales in the ATV/side-by-side business.
The company recorded 6.5% decline in operating income to $36.3
million from $38.8 million in the year-ago quarter. Operating
expense rose 0.6% to $25.4 million from $25.3 million a year ago.
Revenues from the
Snowmobile & ATV
business improved 5% to $208.1 million, driven by higher revenues
from the ATV and Snowmobiles business.
Revenues from the ATV/Side-by-Side business rose 4% to $72.7
million. The improvement was driven by higher demand from dealers
for the Wildcat X and the four-seat Wildcat 4 pure sport
side-by-sides. The company remains focused on growing the ATV
business through new product introductions and expansion in the
international market. Revenues from the Snowmobiles business
improved 5% to $135.4 million versus $128.6 million in the
Revenues from the
Parts, Garments and Accessories
(PG&A) business went down 1% to $30.4 million. The decrease
was due to a drop in garments sales, which offset the increase in
sales of parts and accessories.
Arctic Cat had cash and short-term investments of $40.1 million
as of Sep 30, 2013, compared with $24 million as of Sep 30, 2012.
The company had no debt in the reported quarter.
For fiscal year ending Mar 31, 2014, Arctic Cat expects earnings
per share to be in the range of $3.27 to $3.37, reflecting a rise
of 13%-17% from prior-year earnings of $2.89. The company expects
revenues between $754 million and $768 million, representing a
year-over-year increase of about 12% to 14%.
Arctic Cat makes snowmobiles and ATVs under the Arctic Cat brand
name and supplies related parts, garments, and accessories. The
company markets its products through a network of independent
dealers located throughout the U.S and Canada, and through
distributors representing dealers in Europe, Middle East, Asia
and other international markets. It currently holds a Zacks Rank
Smith & Wesson Holding Corporation
Sturm, Ruger & Co. Inc.
Polaris Industries, Inc.
) are performing well in the same industry where Arctic Cat
operates. While Smith & Wesson is a Zacks Rank #1 (Strong
Buy) stock, Polaris Industries Inc. and Sturm, Ruger & Co.
carry Zacks Rank #2 (Buy).
ARCTIC CAT INC (ACAT): Free Stock Analysis
POLARIS INDUS (PII): Free Stock Analysis
STURM RUGER&CO (RGR): Free Stock Analysis
SMITH & WESSON (SWHC): Free Stock Analysis
To read this article on Zacks.com click here.