Winnebago Reports 4Q Earnings

[Duner]

AP
Winnebago Earnings Tumble on Sales Slide
Thursday October 12, 4:54 pm ET
By David Pitt, AP Business Writer
Winnebago 4Q Earnings Tumble As Interest Rates, Fuel Prices Hurt Recreational Vehicle Sales

DES MOINES, Iowa (AP) -- Motor-home manufacturer Winnebago Industries Inc. reported sharply lower profits for its fiscal fourth quarter due to product liability claims and a decrease in sales because of higher interest rates and fuel prices.

Shares of the company fell $1.08, or 3.14 percent, to close at $33.28 on the New York Stock Exchange.

The Forest-City, Iowa-based company earned $9.3 million, or 30 cents a share, for the quarter, compared with $15.4 million, or 46 cents a share, a year ago.

Sales for the quarter were reported at $205.4 million, a decreased of 11.3 percent from sales of $231.5 million a year ago.

Fuel prices, interest rates and more consumer demand for lower-priced recreational vehicles pressured the entire industry, company officials said in a statement.

The company reported a one-time gain of 3 cents a share as it sold off motor homes to reduce inventory. It also booked a one-time charge for the quarter of 4 cents a share for increased product liability claims. Excluding items, latest-quarter earnings totaled 31 cents per share.

Analysts surveyed by Thomson Financial were expecting 40 cents a share on sales of $228 million. Winnebago also booked a charge of 2 cents per share for stock-option expenses, which analysts had factored into their estimates.

Winnebago reported full-year earnings of $44.7 million, or $1.37 a share, on sales of $864.4 million, compared with $65.1 million, or $1.92 a share, on sales of $992 million a year ago.

Analysts had expected earnings of $1.47 per share on sales of $886.17 million for the full year.

"While negative economic factors, including rising interest rates, record fuel prices and declining consumer confidence created a very difficult market for the motor home industry, we remained solidly profitable," said CEO Bruce Hertzke.

He said a recent decline in fuel costs and a pause in interest rate increases could improve the market for RVs.

"We do not currently, however, see an immediate change in motor home buying patterns, and anticipate continued softness throughout our first and second fiscal quarters," Hertzke said.

The average selling price of motor homes in the quarter was $76,187, about 11.5 percent lower than the average price for the same period a year ago of $86,062, reflecting the consumer turn toward lower priced units. Motor homes range in price from the largest diesel powered units selling for an average $155,135 to smaller gas-powered units selling for $57,970.

Hertzke said despite lower profits in recent quarters, the company remains in good financial shape with a cash balance of $154 million. As a result, it will continue to return money to shareholders through stock repurchases and dividends.

Winnebago returned $57.8 million to shareholders through share repurchases in 2006 and $11.7 million in dividends.

"We will continue to use that same philosophy," he told industry analysts in a conference call. "We've continued to do this pretty steadily for seven consecutive years and I'm sure we will continue to do the same thing."

The company also declared a 10-cent quarterly dividend payable on Jan. 8 to shareholders of record on Dec. 8.

[Duner]

AP
Winnebago Earnings Tumble on Sales Slide
Thursday October 12, 4:54 pm ET
By David Pitt, AP Business Writer
Winnebago 4Q Earnings Tumble As Interest Rates, Fuel Prices Hurt Recreational Vehicle Sales

DES MOINES, Iowa (AP) -- Motor-home manufacturer Winnebago Industries Inc. reported sharply lower profits for its fiscal fourth quarter due to product liability claims and a decrease in sales because of higher interest rates and fuel prices.

Shares of the company fell $1.08, or 3.14 percent, to close at $33.28 on the New York Stock Exchange.

The Forest-City, Iowa-based company earned $9.3 million, or 30 cents a share, for the quarter, compared with $15.4 million, or 46 cents a share, a year ago.

Sales for the quarter were reported at $205.4 million, a decreased of 11.3 percent from sales of $231.5 million a year ago.

Fuel prices, interest rates and more consumer demand for lower-priced recreational vehicles pressured the entire industry, company officials said in a statement.

The company reported a one-time gain of 3 cents a share as it sold off motor homes to reduce inventory. It also booked a one-time charge for the quarter of 4 cents a share for increased product liability claims. Excluding items, latest-quarter earnings totaled 31 cents per share.

Analysts surveyed by Thomson Financial were expecting 40 cents a share on sales of $228 million. Winnebago also booked a charge of 2 cents per share for stock-option expenses, which analysts had factored into their estimates.

Winnebago reported full-year earnings of $44.7 million, or $1.37 a share, on sales of $864.4 million, compared with $65.1 million, or $1.92 a share, on sales of $992 million a year ago.

Analysts had expected earnings of $1.47 per share on sales of $886.17 million for the full year.

"While negative economic factors, including rising interest rates, record fuel prices and declining consumer confidence created a very difficult market for the motor home industry, we remained solidly profitable," said CEO Bruce Hertzke.

He said a recent decline in fuel costs and a pause in interest rate increases could improve the market for RVs.

"We do not currently, however, see an immediate change in motor home buying patterns, and anticipate continued softness throughout our first and second fiscal quarters," Hertzke said.

The average selling price of motor homes in the quarter was $76,187, about 11.5 percent lower than the average price for the same period a year ago of $86,062, reflecting the consumer turn toward lower priced units. Motor homes range in price from the largest diesel powered units selling for an average $155,135 to smaller gas-powered units selling for $57,970.

Hertzke said despite lower profits in recent quarters, the company remains in good financial shape with a cash balance of $154 million. As a result, it will continue to return money to shareholders through stock repurchases and dividends.

Winnebago returned $57.8 million to shareholders through share repurchases in 2006 and $11.7 million in dividends.

"We will continue to use that same philosophy," he told industry analysts in a conference call. "We've continued to do this pretty steadily for seven consecutive years and I'm sure we will continue to do the same thing."

The company also declared a 10-cent quarterly dividend payable on Jan. 8 to shareholders of record on Dec. 8.