Updated from 10:48 a.m. EDT
on Thursday projected a "significant shortfall" in first-quarter earnings due to shrinking sales of its recreational vehicles and manufactured homes.
The nation's largest RV manufacturer, and one of the largest producers and retailers of manufactured housing, expects to barely break even in its operating earnings for the first quarter, ending July 30. That's a big difference from a year ago, when Fleetwood reported earnings of 72 cents per share for the same period.
Fleetwood President Nelson Potter blamed a reduction in sales volume and motor home production for the projected drop in first-quarter earnings. In addition, he said that RV dealers, faced with lagging sales, have been reluctant to order more of the current models, leaving the company with excess, and potentially obsolete, materials.
To help reduce its unexpectedly high motor home inventories, Potter said Fleetwood has introduced new sales incentive programs, encouraging retail motor home dealers to boost orders for the current models. Though he said retailers have been receptive to the programs, the additional marketing costs, along with weaker RV sales overall, will likely lead to a loss in the motor home division -- the company's largest -- in the first quarter.
The Riverside, Calif.-based company also anticipates weak sales in its manufactured housing sector. Potter said the division has cut overhead costs and reduced its capacity and production schedules. Still, he warned, the business outlook "remains clouded by the uncertain retail financing environment."
Just a couple of months ago, the company was touting its record revenues for fiscal year 2000, which ended in April. It reported an all-time high of $3.71 billion in annual revenues, 6% above the previous year. However, Fleetwood officials acknowledged that revenue for the fourth quarter had declined as a result of weaker manufactured housing and RV sales.
Since peaking at a 52-week high of 26 7/16 almost a year ago, Fleetwood's stock has drifted downward. In Thursday trading, shares of Fleetwood closed down 1/2, or 3%, at 14 1/4 after reaching a 52-week low of 13 3/4.