Disciplined cost controls and a fleet of new products helped Polaris Industries Inc. deliver a solid third quarter with double-digit sales and profit gains, officials said Wednesday.
Sales of ATVs, motorcycles, snowmobiles and accessories jumped 12 percent to a record $1.46 billion from a year ago, while profits climbed 10 percent to $155.2 million, or $2.30 a share, for the quarter ended Sept. 30. Motorcycles had the largest growth, rising 154 percent during the quarter, while ATV and side-by-side sales rose 3 percent.
Results beat Wall Street expectations. On average, analysts forecast earnings of $2.28 a share and sales of $1.43 billion. Company officials raised the lower end of their earnings guidance for full year 2015, saying earnings would reach $7.37 to $7.42 per share, slightly changed from the previous guidance of $7.32 to $7.42 a share.
Sales for 2015 however, are now expected to rise 10 to 11 percent, down from the prior 10 to 12 percent forecast due to negative foreign exchange rates that are pinching sales. Traditionally gung-ho investors did not like the restrained forecast. Polaris' stock price plunged 10.2 percent Wednesday to close at $107.83.
In a call to analysts, company officials said they introduced 15 new recreational vehicles and hundreds of new parts and accessories during the quarter. Robin Farley, power sports analyst with UBS Securities, noted that "motorcycle shipments and retail sales exceeded expectations."
Other analysts were pleased that Polaris had largely "stabilized" the costly problems that arose with last quarter's installation of a new vehicle paint line in its Spirit Lake, Iowa, facility.
CEO Scott Wine said Polaris made "consistent enhancements" to that plant throughout the quarter.
He praised overall results, citing growth despite global economic challenges that included the slowdown in agriculture equipment, mining and oil industries. Polaris vehicles are also widely used on farms, ranches, industrial fields and between buildings on manufacturing campuses.
