Polaris Keeps Up Its Winning Streak
Polaris Industries Inc. (NYSE:PII) has upped its 2012 outlook as the company again reported profit that exceeded analysts’ estimates with increased sales of its off-road vehicles. Polaris stock, which has had an eight-quarter run of trouncing estimates, gained as much as 8 percent to reach an all-time high in pre-market trading on Wednesday.
In a statement, Polaris Chief Executive Officer Scott Wine noted that in the North American off-road vehicle and motorcycle industries, sales were “off to their best start in years.” Retail sales of the Minneapolis-based company’s off-road vehicles in North America were up by more than 20 percent for the quarter, according to Polaris.
First-quarter performance was boosted by sales of the new Ranger RZR XP4 900, introduced in January, which is used for travel in sandy environments like deserts. Overall, Polaris’ off-road vehicles make up 7 percent of sales. The vehicles are used on farms and construction sites, as well as in outdoors sports including fishing and hunting. Sales were up 30 percent in the segment to $504.6 million.
During the first quarter, the company began shipping two new models in its on-road vehicle segment: the Victory Hard Ball and Victory Judge. Polaris’ vehicles can fetch as much as $28,000 retail. Sales in this segment saw a healthy 44 percent increase. In the first quarter, margins were up 60 basis points, the company said. Its competitors include Harley Davidson (NYSE:HOG), Honda Motor Co. (NYSE:HMC), Yamaha Motor Corp., Suzuki Motor Corp., and Arctic Cat Inc.
The company now foresees full-year earnings of $3.85 to $4.00 per share, up from an earlier outlook of $3.65 to $3.80. It revised its revenue-growth forecast to 10 percent to 13 percent from the earlier outook of 5 percent to 8 percent. On average, analysts were forecasting a profit of $3.88 per share, according to Thomson Reuters I/B/E/S. Polaris earned 85 cents a share on revenue of $673.8 million in the first quarter, handily beating analysts’ estimates.