US: Winnebago sales rise, but shares fall image

Winnebago Industries Inc, the world famous US motorhome producer saw its quarterly profit jump 22% because of rising demand for the company’s products.

Motorhome deliveries for the three-month period jumped 25%, from 1,890 units in the year ago period to 2,364 this year. Net income for the motorhome builder is up to $12.9 million, or 48 cents per share, rising from $10.6 million, or 38 cents per share. Revenue also climbed almost 15% to $245.9 million.

Unfortunately for the iconic producer the positive results have not been enough, as the fourth-quarter’s average selling price for the stock went down 8.4%. The result has been linked to the company’s move to enter the more affordable motorhome market – which affects earnings. The shares are now 7% down, reaching a 16-month low.

The producer is closely watched by investors because it’s a very good indicator for customer demand for big-ticket discretionary items, as the small-series recreational vehicles can have the price anywhere between $65,000 to a whopping $426,000.
Chief Executive Randy Potts acknowledged the company’s orders for top-end and highly expensive motorhomes have dropped close to 50% from the 2013 figures, adding they have an order backlog of 302 units now. Griffin Securities Inc analyst Morris Ajzenman says investors are now concerned that average motorhome prices would continue to decline in the next few years as the US household income growth creeps to a halt.