Winnebago (WGO) Beats Q3 Earnings and Revenues Estimates

Share price of Winnebago Industries Inc. WGO increased 14.2% to $33.45 on Jun 21 owing to better-than-expected earnings and revenues in the third quarter of fiscal 2017 (ended May 27, 2017).

Winnebago recorded adjusted earnings of 94 cents per share in third quarter, beating the Zacks Consensus Estimate of 66 cents. For the year-ago period, earnings were 53 cents per share. Growth in earnings was impacted because of recognition of amortization expenses associated with the Grand Design acquisition during the aforesaid quarter. Net income on a reported basis increased 34.3% to $19.4 million or 61 cents per share.

Revenues in third quarter surged 75.1% to $476.4 million from $272.1 million in the prior-year quarter. The figure also outpaced the Zacks Consensus Estimate of $443 million. This upside in top line was driven by strong growth of the Towable business.

Operating profit in the reported quarter increased to $34.9 million from $20.6 million in the year-ago quarter. Gross profit improved to $70.8 million, an impressive rally of 134% from $30.3 million, recorded a year ago.

Segment Results

Revenues from Motorized segment declined 2% to $241.7 million from the year-ago period. Adjusted EBITDA dropped to $12.6 million, primarily driven by pricing adjustments, product mix and transitioning production costs related to the company's facility at Junction City, OR.

Revenues from the Towable segment went up to $234.7 million in comparison to $209.3 million in the third quarter of fiscal 2016. This upside was driven by adding revenues from the Grand Design acquisition and strong organic growth from Winnebago-branded Towable products. Adjusted EBITDA was pegged at $34.7 million from $1.5 million in the year-ago quarter.

Winnebago Industries, Inc. Price, Consensus and EPS Surprise

Winnebago Industries, Inc. Price, Consensus and EPS Surprise | Winnebago Industries, Inc. Quote

Financial Position

Winnebago had cash and cash equivalents of $24.4 million as of May 27, 2017 compared with $85.6 million as of Aug 27, 2016.

In the first nine months of fiscal 2017, Winnebago's cash inflow from operations was $67.4 million compared with an inflow of $31.7 million in the year-ago period.

Dividend

On May 24, 2017, the board of directors at Winnebago approved a quarterly dividend of 10 cents per share. The dividend will be paid on Jul 26 to stockholders on record as of Jul 12.

Price Performance

In the last three months, Winnebago's shares have gained 13.2% compared with the Zacks categorized Building-Mobile Manufacturing & Recreation Vehicles industry's record of 7.6% increase.