UPDATE: Arctic Cat Posts Upbeat Q3 Earnings, Issues Weak Forecast

reported stronger-than-expected earnings for the fiscal third quarter. However, the company issued a weak outlook for the full year. The Plymouth, Minnesota-based company posted quarterly net income of $7.5 million, or $0.57 per share, compared to $12.1 million, or $0.89 per share, in the year-ago quarter. Excluding non-recurring items, the company earned $0.68 per share. Its revenue slipped to $193.7 million from $225.8 million. However, analysts were expecting earnings of $0.48 per share on revenue of $198.7 million. Sales of Arctic Cat's all-terrain vehicles and side-by-sides rose 7% to $83.9 million, while snowmobile sales slipped to $81.5 million in the latest quarter from $118.1 million. Sales of parts, garments and accessories also declined to $28.3 million from $29.5 million. Gross profit margin widened to 18.0% from 17.8%, while operating profit shrank to $5.9 million from $18.4 million. The company ended the quarter with cash and short-term investments totaling $67.5 million, compared to $62.5 million in the year-earlier quarter. Christopher Metz, Arctic Cat's president and chief executive officer said, “Fiscal 2015 is a challenging year of transition where we are resetting our strategic priorities to deliver improved long-term performance. At this time, we are lowering our fiscal 2015 full-year outlook for sales and earnings, as we work through existing challenges. As we stated in the 2015 second quarter, one of our biggest challenges is rightsizing our core North America ATV dealer inventory levels. Bold actions are necessary to return to growth.” For FY15, Arctic Cat projects adjusted earnings of $1.24 to $1.32 per share, on revenue of $705 million to $715 million. Analysts expected earnings of $1.97 per share on revenue of $748 million. Arctic Cat shares rose 0.99% to close at $29.71 yesterday.