Strong sales of "side-by-side" all-terrain-vehicles accelerated Arctic Cat Inc.'s third quarter earnings and prompted officials to raise their forecast for fiscal 2013, the company reported Thursday.
"We are very pleased to report record earnings per share and increased sales ... [ especially when] compared to a strong prior year quarter of double-digit sales and earnings gains," CEO Claude Jordan said. "The company's results are in line with our expectations for continued top- and bottom-line growth."
At the same time, North American sales of traditional ATVs dipped during the quarter. Global snowmobile sales fell 2 percent to $122 million despite growth in Sweden, Norway, Finland and Russia. Parts and garment sales fell 5 percent to $26 million during the quarter, Jordan told analysts on a conference call Thursday.
During the quarter, Arctic Cat introduced two new Wildcat sport side-by-side models, which will begin shipping during the fourth fiscal quarter, Jordan said. The company's new four seater model is also gaining traction.
Going forward, North American side-by-side sales are expected to be particularly strong in 2013 and 2014. KeyBanc Capital Markets analyst Scott Hamann said he assumes the newfound popularity means Arctic will continue to roll out additional new products that can capture the momentum.
Jordan agreed and noted that he increased R&D spending by 15 percent in order to push more new products.
He has raised his earnings forecast for fiscal 2013 of $2.65 to $2.75 a share to the new guidance of $2.75 to $2.85 a share. The latter is a 60 to 66 percent jump from 2012. Full year sales are expected to grow 13 to 17 percent to reach $664 million to $684 million.
Investors liked that change. Arctic Cat's stock price closed Thursday at $37.33, up $1.34.
