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Fleetwood Enterprises Inc., including both its RV and manufactured home-building and retailing operations, remained profitable during its second fiscal quarter, despite narrower travel trailer/fifth-wheel profit margins.
Fleetwood’s net income totaled $3.8 million during its second fiscal quarter, which ended Oct. 26, which represents an 18% decline from the $4.6 million it earned during the August-through-October portion of 2002. However, the company’s net income a year-ago was inflated by a one-time-only gain of $2.6 million from the sale of real estate.
Fleetwood now has been profitable for two consecutive quarters, the first time that has happened since its fiscal year 2000, according to Ed Caudill, president and CEO.
During the first half of its fiscal year 2004, which ended Oct. 26, Fleetwood’s earnings increased 84% to $5.7 million, compared with $3.1 million earned a year earlier.
The New York Stock Exchange-listed company’s total sales increased 5% during the three months ended Oct. 26 to $674.7 million, and its RV sales revenue climbed 14% higher during the period to $450 million.
However, Fleetwood’s RV-related operating earnings declined 3% during the August-through-October period to $16.5 million, compared with $17 million a year earlier. “Profitability of the RV Group was down slightly due to the results in our travel trailer division,” Caudill said. “Despite higher sales of our refreshed line of travel trailer products, this division continues to contend with low gross margins.”
Consequently, Fleetwood’s travel trailer/fifth-wheel operations, and its manufactured housing retail dealerships, “continue to be areas of intense management focus,” Caudill said.
During the six months ended Oct. 26, Fleetwood’s total sales increased 6% to $1.32 billion and its RV-related sales revenue grew by 16% to $886.6 million. However, its RV-related operating earnings declined by 10% during the six-month period to $31.4 million, compared with $34.7 million a year earlier.
Caudill anticipates Fleetwood will report a net loss for its third fiscal quarter, which will end in late January. However, he believes the company’s net loss during the third quarter of its fiscal year 2004 will be “substantially smaller” than the loss it reported during the third quarter of its fiscal year 2003.
Caudill believes Fleetwood will return to profitability during its fourth fiscal quarter, which will end in late April.