Arctic Cat Slides on Chilly Forecast

The maker of snowmobiles forecasts a profit slowdown.
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Arctic Cat

(ACAT)

sank 7% Thursday after the snowmobile maker's numbers came in shy of Wall Street estimates.

For its quarter ended March 31, the Thief River Falls, Minn., manufacturer of all-terrain vehicles posted a loss of $1 million, or a nickel a share. That's narrower than the year-ago loss of $1.7 million, or 8 cents a share, but a penny shy of the analyst consensus estimate quoted by Thomson First Call.

Latest-quarter sales rose 26% from a year ago to $140 million.

The company said the seasonal nature of its snowmobile and ATV businesses dictates that it sells most of its products during its second and third fiscal quarters, and typically reports a small loss in the fourth quarter.

"We are pleased to report our fourth consecutive year of record sales," said CEO Christopher Twomey. "Our growth continued to be driven primarily by increased market penetration of our award-winning ATVs. In fact, fiscal 2004 marks the first year in Arctic Cat's history that ATV revenues were greater than snowmobile revenues."

The company offered financial guidance that was at the low end of analysts' expectations. The company forecast first-quarter sales of around $90 million and a bottom-line result ranging from break-even to a loss of 6 cents. For the year, the company forecast a profit of around $1.48 a share on sales of $688 million.

Analysts had forecast a 5-cent profit on sales of $82 million for the first quarter, and a $1.58 profit for the year on sales of $670 million.

Arctic Cat shares slipped $1.53, to $21.74.