Despite ongoing trade-tariff woes, Polaris Industries reported a solid third quarter Monday, one in which sales and profits saw double-digit increases with help from four-wheeler demand and contributions from a newly acquired boat business.
The results, which beat Wall Street expectations, included sales that rose 12 percent to $1.65 billion and net income that rose 17 percent to $95.5 million, or $1.50 a share.
Excluding costs from the shutdown of the Victory Motorcycle product line, the purchase of a boat company and other one-time restructuring costs, adjusted earnings were $1.86 per share. On average, analysts had expected $1.57 per share on sales of $1.64 billion.
Polaris maintained its prior sales and profit guidance for the year. The Medina-based maker of ATVs, snowmobiles, motorcycles, electric vehicles, accessories and boats still anticipates full 2018 sales will grow 11 to 12 percent and that adjusted earnings will be $6.48 to 6.58 per share.
The forecast includes "an estimated $40 million of tariff cost increases anticipated in 2018 before counter measures," the company said.
CEO Scott Wine told analysts during a morning conference call that the U.S. trade-tariff issue is increasing the cost of domestic steel and aluminum prices and Chinese imports. Analysts had plenty of questions about what the tariff ramifications could mean for the company long-term.
Wine said he could not predict what trade war costs might be in 2019.
However, Wine said Polaris was able to hold to the prior $40 million tariff-hit estimate for 2018 only by taking three types of "aggressive action." Those included some product price increases, lobbying Congress and the Trump administration, and fighting hard to win exemptions to specific tariff rules that Wine said specifically affected domestic manufacturers like Polaris.
