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Thor (THO) Stock Down 4.4% on Q2 Earnings & Revenue Miss

Thor Industries, Inc.THO reported second-quarter fiscal 2019 (ended Jan 31, 2018) adjusted earnings of 65 cents per share, missing the Zacks Consensus Estimate of 88 cents. Excluding acquisition-related costs, the company reported loss of 10 cents per share in the quarter under review versus prior-year earnings of $1.51. Quarterly income was significantly affected by an unusually high effective tax rate. The company's second-quarter effective tax rate was 389.1% compared with 43.5% a year ago.

Shares of Thor have lost 4.4% in yesterday's trading session after the earnings release.

In the quarter under review, revenues slumped 34.5% year over year to $1.29 billion. The figure also lagged the Zacks Consensus Estimate of $1.48 billion.

Gross profit was $141.6 million compared with $270.3 million recorded in second-quarter fiscal 2018. Gross profit margin contracted 270 basis points to 11% from the year-ago quarter. This was mainly due to lower sales and increased sales promotions.

Thor Industries, Inc. Price, Consensus and EPS Surprise

Thor Industries, Inc. Price, Consensus and EPS Surprise | Thor Industries, Inc. Quote

Segment Results

Sales of Towable RVs fell 35.8% year over year to $881.6 million. The slump was due to lower unit volume. Higher discount level along with slightly increased warranty costs lowered the segment's gross profit margin to 10.9% from a year ago.

Sales from Motorized RVs declined 33.7% year over year to $371.5 million due to lower unit sales. Consequently, the segment's gross profit margin declined to 9.8% on a year-over-year basis.

Financial Position

As of Jan 31, 2019, Thor had cash and cash equivalents of $305.8 million, up from $275.2 million on Jul 31, 2018.

Zacks Rank & Stocks to Consider

Thor currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Construction space are Jacobs Engineering Group Inc. JEC , Altair Engineering Inc. ALTR and EMCOR Group, Inc. EME , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Jacobs, Altair and EMCOR's 2019 earnings are expected to grow 18.2%, 58.6% and 6.9%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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