Polaris Industries Inc. says net income from the third quarter ended Sept. 30 was $37.7 million, or $1.13 per diluted share, down from net income of $39.1 million, or $1.07 per diluted share during the same nine-month period in 2007. Sales for the third quarter 2008 totaled a record $580.3 million, an increase of seven percent from last year’s third quarter sales of $544.0 million.
ATV … $371.2 million (2008 Q3) … $353.3 million (2007 Q3)
Snowmobile … $94.6 million (2008 Q3) … $91.7 million (2007 Q3)
Victory … $20.9 million (2008 Q3) … $21.4 million (2007 Q3)
PG&A … $93.5 million (2008 Q3) … $77.6 million (2007 Q3)
ATV sales of $371.2 million in the 2008 third quarter increased five percent from the third quarter 2007. Polaris says the side-by-side business remained strong during the quarter with the Ranger RZR continuing to sell well along with the Ranger Crew six passenger. However, the overall market for traditional ATVs sold in North America remained very weak during the third quarter 2008 resulting in fewer shipments of Polaris ATVs to North American dealers as they continued to reduce their core ATV inventory levels in a tough economic environment.
Snowmobile sales of $94.6 million increased three percent from the third quarter 2007. Polaris says the increase reflects shipments of higher priced snowmobiles during the 2008 third quarter compared to the 2007 third quarter.
Victory sales of $20.9 million decreased two percent from the third quarter 2007 – a trend Polaris says stems from a weakness in the North American motorcycle industry retail sales for heavyweight cruiser and touring motorcycles continued.
PG&A sales of $93.5 million increased 20 percent from the third quarter 2007. The company says PG&A sales benefited from over 260 new accessory items introduced for 2009, as well as shipments of pre-season, snowmobile-related PG&A to dealers in preparation for the upcoming riding season.
Polaris says the availability of retail credit to Polaris consumers remains at acceptable levels as measured by approval and penetration rates. Polaris customers are offered retail revolving credit through HSBC Bank and installment financing credit through GE Money Bank.
During the third quarter 2008, over 50 percent of consumer retail credit loan applications from Polaris customers were approved by either HSBC or GE, and 41 percent of Polaris retail customers in the United States financed their Polaris product purchases through HSBC or GE. Both the approval rate and penetration rate increased during the 2008 third quarter compared to the 2007 third quarter despite turbulent credit markets.
Polaris leadership expects fourth quarter 2008 sales growth to be in the range of flat to up two percent over the fourth quarter of 2007, with earnings from continuing operations in the range of $1.07 to $1.10 per diluted share for the fourth quarter of 2008 compared to earnings of $1.07 per diluted share in the fourth quarter 2007. For the full year 2008, sales are expected to grow in the range of ten to eleven percent, with earnings from continuing operations to be in the range of $3.47 to $3.50 per diluted share, compared to earnings from continuing operations of $3.10 per diluted share for the full year 2007.
Executives say they are basing their outlook on the orders received from dealers for model year 2009 products and the continued strength in several markets including the side-by-side market segment, along with ongoing productivity and efficiency improvement efforts.