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Polaris sees income drop 17% |
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Decline less than expected, company adjusts '09 earnings target
Polaris Industries reports third quarter income of $31.2 million, down 17% from a year earlier, but exceeding the company's expectations.
In addition, the Medina, Minn., company reports third quarter sales decreased 25%from $580.3 million a year ago to $436.2 million. Total sales for nine months were down 23% from $1.4 billion in 2008 to $1.1 billion this year.
After beating its own expectations for the quarter, Polaris increased its expected 2009 earnings figures for 2009, citing improved dealer orders, year-to-date operating results and the current sales outlook. However, sales for the full year still are expected to decline 20% to 22% compared to 2008.
Fourth quarter sales are expected to be down 12% to 17% from a year ago.
"In July, we took the recession head on and introduced more than 25 new products for model year 2010, which appeal to both the value-oriented consumer as well as the consumer looking for fully featured vehicles," said Scott Wine, Polaris' CEO.
Factory and dealer inventories each decreased 18% in the third quarter of 2009 compared to a year earlier, the company said.
For the quarter, snowmobile sales dipped 13% to $82.2 million compared with $94.6 million last year. Nine month sales were down 11% from $110.1 million in 2008 to $97.8 million this year. In the second quarter Polaris had reported a 23% increase in snowmobile sales. Polaris said the decrease is a reflection of the weak economy offset by the product mix benefit related to 2010 shipments. During the third quarter they began initial shipments of the Polaris Rush, voted Best New Tech sled by American Snowmobiler Magazine. The Off Road Vehicle division's sales (including ATVs) were $261.1 million in the quarter, compared with $371.2 million in the same period last year, a 30% decrease. Sales dipped 25% for the nine months from $986 million in 2008 to $739.3 million in 2009. Polaris attributed this to the weak economy and a reduction in inventory at dealerships. The Parts, Garments, and Accessories division's sales slipped 11% in the quarter from $93.5 million to $83.5 million. For the nine months sales dropped 13% from $256.8 million to $224.3 million. Polaris attributes the modest declines to their loyal customer base still buying these less costly products. The On-Road division, consisting mainly of Victory motorcycles, saw sales drop 56% for the quarter. Sales fell from $371.2 million last year to $261.1 million in this quarter. For the nine months ending Sept. 30, sales were down 25% from $986 million to $738.3 million.
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