The Medina company’s third quarter beat expectations as ATV, snowmobile and accessory sales rose.
Polaris Industries Inc. had plenty to brag about on Tuesday, but Wall Street sure wasn’t buying it.
The Medina-based company beat third-quarter expectations, hoisted its forecast for the year and reported a jump in ATV, snowmobile and accessory sales. Still, Polaris shares fell almost 4 percent Tuesday as its up-and-coming motorcycle division failed to impress investors. Sales for the unit slid 6 percent in the quarter.
Polaris launched its long-awaited redesign of the Indian motorcycle in August, spurring an advertising and public relations blitz with thousands of demo rides and tours of company factories.
But CEO Scott Wine told analysts Tuesday that the bike shipments didn’t begin until September, hurting sales. “This is just the calm before the storm because the Indian is poised for rapid growth,” he said. The new bikes will be in 200 Indian dealerships by early next year, 70 of them outside of North America, Wine said.
Global ATV sales, however, jumped 23 percent to $702 million for the quarter.
The company’s parts and accessories unit jumped 37 percent to $176 million, while its snowmobiles division rose 25 percent to $143 million amid strong demand in Russia and Scandinavian countries. Even Polaris’ fledgling electronic and small vehicle division rose 188 percent to $31 million in quarterly revenue. Polaris’ small military vehicle unit also did well, scoring one German and two U.S. contracts.
However, Wine noted that U.S. budget cuts have hurt future domestic orders.
Overall, product sales pushed quarterly revenue up 25 percent to $1.1 billion, beating analysts’ expectations for $1.05 billion. Excluding a loss from discontinued operations, net income rose 24 percent to $116.9 million, or $1.64 a share. That beat analysts’ forecasts of $1.61 a share.
Earnings would have been higher, but a confidential agreement to terminate a contract snipped off 10 cents per share, officials said.
Wine said he expects Indian and new ATV products, and strong international demand, to make Polaris an $8 billion company in seven years or so.
Polaris also raised its outlook for the rest of the year.
Earnings are now expected to be between $5.30 and $5.37 a share, up from its previous forecast of $5.20 to $5.30 a share, Chief Financial Officer Mike Malone told analysts during a conference call Tuesday. Sales are expected to grow 15 to 16 percent for the full year, up from the prior forecast of 13 to 15 percent.