Winnebago Industries Inc. said Thursday (June 16) its third quarter earnings dipped slightly from a year ago due to lower deliveries of motorhomes, reduced factory production and discounts by competitors.
But the results still beat Wall Street’s expectations, boosting shares by $2.56 to $36.07 in yesterday’s trading on the New York Stock Exchange. The shares have traded in a 52-week range of $28.32 to $40.64.
Analysts were buoyed by Winnebago’s surprisingly strong margins, resulting in favorable earnings per share, despite industry pressures and a soft motorhome market. But yesterday’s report also showed a depleted inventory compared with 2004, reflecting Winnebago’s production cuts during the period.
“Our performance last year was obviously a lot stronger than this year,” said Bruce Hertzke, Winnebago chairman and CEO, on a conference call Thursday morning.
The Forest City, Iowa builder reduced its inventory during the quarter by 6.6% and was able to save on operating costs by reducing its factory work schedules by 12.5%, from 64 to 56 days, during the period.
Hertzke said he hopes to reduce the inventory surplus by an additional $10 million by the end of the year.
Hertzke expects demand to remain lower for the fourth quarter and through next year, but said the overall picture is positive.
“We continue to believe long-term prospects remain very positive for the RV industry and Winnebago Industries,” Hertzke said.