Arctic Cat ( ACAT) surged 8% Thursday as the company showed gains in shifting its focus away from a softening snowmobile business. For its third quarter ended Dec. 31, the Thief River Falls, Minn., snowmobile maker earned $5.8 million, or 28 cents a share. That's down from the year-ago $9.7 million, or 46 cents a share, but a penny ahead of the Wall Street analyst consensus estimate. Sales fell 3% from a year ago to $188.6 million, missing the $191 million Thomson First Call consensus estimate. The company said snowmobile sales fell 22% from a year ago, continuing a planned reduction in 2005 output following several seasons of poor snow conditions. But all-terrain vehicle sales surged 25% to $84 million, and production of the first Arctic Cat-designed and built ATV engine, the new 650 H1, is proceeding, the company said. "ATV sales continue to be our primary growth driver and we are successfully increasing our share of this market," said CEO Christopher Twomey. "During calendar year 2004, Arctic Cat's sales growth again outpaced the industry as we have every year since entering the ATV market." The company reaffirmed fourth-quarter and fiscal 2005 guidance, saying it expects to make 24 to 29 cents a share for the fourth quarter on sales of $155 million to $168 million. For the year, earnings should be around $1.46-$1.51 a share on sales of about $693 million. Those figures are in line with the Wall Street analyst consensus. "We expect higher sales of ATVs in our fiscal fourth quarter than in previous fourth-quarter periods, leading to record full-year sales and higher earnings," said CEO Twomey. On Thursday, Arctic Cat shares rose $1.67 to $25.53.