Maybe investors will take a different look at Monaco Coach Corp. stock in light of the sharply higher earnings report the New York Stock Exchange-listed company issued today (Jan. 28)?
The price of Monaco stock fell to new 52-week lows late last week and on Monday (Jan. 27), but the company reported today that its net earnings increased 59% during the fourth quarter and 79% for all of 2002.
Monaco earned $12.1 million during the three months ended Dec. 28, compared with $7.6 million earned a year earlier. For the 12 months ended Dec. 28, Monaco earned $44.5 million, compared with $24.9 million in 2001.
Meanwhile Monaco’s sales revenue climbed 15% higher during the fourth quarter to $300.7 million, compared with $261.6 million a year earlier. For the full year 2002, Monaco’s sales increased 30% to $1.22 billion, compared with $937.1 million in 2001.
Monaco’s stock price sunk as low as $11 a share on Monday, a new 52-week low, before closing at $12.08, down $1.16 a share, because investors believe that the diesel-pusher market is past its cyclical peak and because of fears about the economic impact of a possible war with Iraq.
Salomon Smith Barney’s lowering of its rating of Monaco to “underperform” from “outperform” also contributed to the sell-off Monday. Almost 1.6 million Monaco shares changed hands Monday, sharply higher than its typical daily trading volume of 181,000 shares.
Salomon also believes RV sales will be flat this year, a more pessimistic outlook than the industry’s forecast for 5% growth.
However, Monaco Chairman and CEO Kay Toolson said today, “We remain bullish on our industry outlook, despite persistent economic challenges. While many market segments remain very competitive, we’re focused intently on product development and market share in the gasoline and diesel-powered motorhome and towable market segments.
“Our towable production expansion project (in Elkhart, Ind.) remains on track and we should have additional towable production capacity available by midyear,” Toolson added.
Meanwhile, the retail market for RVs should grow as rapidly in 2003 as it did in 2002 “barring prolonged military action” or significant economic events, according to Monaco President John Nepute.
Retail sales of Class A and Class C motorhomes increased 10% when the first 11 months of 2002 are compared with the same portion of 2001, according to Statistical Surveys Inc. And retail sales of travel trailers and fifth-wheels increased 14% when the first 10 months of 2002 are compared with the same period a year earlier, Statistical Surveys, an independent market research firm, reported.
“Given the competitive conditions that exist, we are going to be more aggressive with retail sales promotions designed to increase market share and ensure that our models are turning on dealer lots,” Nepute continued. “By carefully, balancing production levels with demand, we believe we can grow our 2003 revenue by 8% to 12%.”
Nepute added that Monaco believes its revenue growth during the first three months of this year will be below the 8% to 12% growth rates it is forecasting for all of 2003.