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Fleetwood Enterprises Inc. more than doubled its income during the company’s second quarter of fiscal 2005, but lower sales in the towable division decreased overall profitability for the three-month period, which came up short of analysts’ estimates.
For the quarter, ended Oct. 24, the Riverside, Calif., company posted a net income of $8.1 million, up from $3.8 million last year. Consolidated revenues for the period were $712.7 million, up 6% from $674.7 million in last year’s second quarter.
Although the motorhome division’s operating income improved to $15.1 million, representing a 6% increase, towables incurred a loss of $6.5 million compared with operating income of $1.7 million in the prior year.
Fleetwood said the loss was primarily because of lower sales, which were down 16% to $148 million, compounded by higher material costs, lower production efficiencies and higher new product development expenses.
Sales were impacted by the division’s relatively late introduction of 2005 models, which began toward the end of the second quarter. The release of additional 2005 products will continue in the third quarter.
“Our new lineup of travel trailers, some of which were introduced as recently as this week at the national RV show in Louisville, Ky., is set to overcome some persistent production challenges,” said President and CEO Ed Caudill, “with innovative designs that incorporate much-improved manufacturability and materials usage. The dealers responded favorably to our new products and recognized our integration of customer and dealer design requests.
“We have completed the consolidation of travel- and folding-trailer operations, which is beginning to yield cost savings, and have integrated the financial reporting of the two divisions into the towable division.”
For the first six months of fiscal 2005, revenues increased 9% to $1.44 billion from $1.32 billion for the first half of last year. Net income was $14.8 million compared with $5.7 million in the first six months of fiscal 2004.