Thor Q1 Earnings & Revenues Surpass Estimates, Rise Y/Y

Zacks

Thor Industries Inc. THO reported first-quarter fiscal 2016 (ended Oct 31, 2015) earnings of 97 cents per share that surpassed the Zacks Consensus Estimate of 85 cents. Earnings increased 33% from 73 cents per share recorded in the first quarter of fiscal 2015. Net income from continuing operations increased 29% to $50.7 million from $39.2 million in the prior-year quarter.

Revenues rose 12% year over year to $1.03 billion, marginally surpassing the Zacks Consensus Estimate of $1.02 billion. The year-over-year improvement was driven by higher sales of towable and motorized RVs, along with benefits from acquisitions.

Gross profit margin improved to 14.8% from 12.8% in the year-ago quarter, led by changes in product mix and improvements in material, labor and warranty costs.

Segment Results

Sales of Towable RVs went up 6% year over year to $744.7 million, driven by revenues from Cruiser and DRV Luxury Suites which were acquired on Jan 1, 2015. Pre-tax income increased 28% to $63.2 million in the reported quarter from $49.3 million in the prior-year quarter.

Revenues from Motorized RVs improved 13% to $251.1 million from $222.2 million in the year-ago quarter. Pre-tax income from the segment increased 43% to $21.7 million from $15.1 million a year ago.

Financial Position

Thor had cash and cash equivalents of $179.3 million as of Oct 31, 2015, down from $313.6 million as of Oct 31, 2014.

Outlook

Thor got off to a strong start in the first quarter of fiscal 2016. The company expects to expand its business in the coming years through acquisitions, new capacity, product innovation and continued dividend payments.

Zacks Rank

Currently, Thor carries a Zacks Rank #3 (Hold). Better-ranked automobile stocks include General Motors Co. GM, Fox Factory Holding Corp. FOXF and O'Reilly Automotive Inc. ORLY. All these stocks carry a Zacks Rank #2 (Buy).

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