Winnebago posts surprise quarterly profit
Winnebago Industries
The results from the leading U.S. maker of recreational vehicles provided an encouraging sign that the nation's fragile economic recovery may be gaining traction -- even as they underscored the rebound's unevenness.
Winnebago said it was seeing renewed dealer demand for all its vehicles, but the resurgence was particularly pronounced for so-called Class A motorhomes -- the biggest and most lucrative of its products.
Demand for those bus-like vehicles, which can cost more than $300,000 and get less than 10 miles to the gallon, had dropped off dramatically in recent years as fuel prices rose and the U.S. real-estate downturn morphed into a full-blown recession.
Sales of Winnebago's more affordable -- and more efficient -- Class B and C vehicles also rebounded, but less sharply.
But the company's shares, which have rallied more than 20 percent over the last month amid growing signs of stability in the U.S. economy, fell more than 4 percent. Analysts attributed the decline to profit-taking and news that Winnebago had filed a shelf registration with the U.S. Securities and Exchange Commission to sell as much as $35 million of its stock.
Winnebago said that while it had no specific plans to go to market with the shares, one of the lessons we have learned during this last recession is to have multiple forms of liquidity in place in order to weather the most difficult of times.
The company, which makes motorhomes under the Winnebago and Itasca brand names, reported a net profit of $706,000, or 2 cents a share, for the second quarter ended on February 27, compared with a year-earlier loss of $10.4 million, or 36 cents a share.
Analysts on average had expected a loss of 9 cents a share, according to Thomson Reuters I/B/E/S.
Revenue more than tripled to $110.5 million from $31.8 million, but came in slightly below the analysts' average estimate of $112.7 million.
Last quarter, there was the first real increase in Class A unit orders, and we're seeing that continue, said Morningstar analyst David Whiston.
Winnebago, which has slashed half its workforce over the past few years as it grappled with the worst downturn in the RV industry's history, said in December that it was rehiring workers, ramping up production and canceling the traditional holiday shutdown to keep up with rebounding demand.
In a statement on Thursday, Chief Executive Officer Bob Olson said the company was continuing to increase production to satisfy dealer order backlogs. But he cautioned that the recovery was still in early stages and vulnerable to setbacks.
While we are encouraged with these improvements, the economic outlook remains uncertain, Olson said, and we believe retail sales will be the key driver to sustain our recovery and for continued growth going forward.
Shares of Winnebago were down 4.3 percent at $13.92 in morning New York Stock Exchange trading. A year ago, during the darkest days of the downturn, they traded near $4.50.
(Reporting by James B. Kelleher; Editing by Derek Caney and Lisa Von Ahn)
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