Winnebago Industries, Inc. WGO reported earnings of 35 cents per share in the second quarter of fiscal 2016 (ended Feb 27, 2016), 16.7% higher than 30 cents earned in the prior-year quarter. Also, the figure marginally surpassed the Zacks Consensus Estimate of 34 cents. Net income increased to $9.4 million from $8.1 million in the year-ago quarter.
Revenues for the second quarter dropped 3.8% to $225.7 million from $234.5 million in the prior-ago quarter. Moreover, the figure fell short of the Zacks Consensus Estimate of $235 million. The year-over-year decline in the top line was due to lower motorized unit shipments together with the company’s exit from aluminum extrusion sales to outside customers. This was partially offset by higher revenues from the towable segment.
Revenues from the towables segment surged 33.8%, backed by a 57.7% rise in unit volume. Unit shipments of motorhomes declined 3.4% year over year.
Operating profit for the reported quarter rose to $13.5 million from $12 million in the prior-year quarter. Gross profit improved to $25.3 million or 11.2% of sales from $24.3 million or 10.3% of sales a year ago. The year-over-year increase in gross margin was backed by better product mix and the realization of cost-saving benefits related to Winnebago’s strategic sourcing initiative. This was partly offset by higher manufacturing costs.
Financial Position
Winnebago had cash and cash equivalents of $36.9 million as of Feb 27, 2016, compared with $70.2 million as of Aug 29, 2015.
In the first half of fiscal 2016, Winnebago’s cash used in operations was $8.8 million, down from $34.1 million in the year-ago period. Capital expenditure increased to $16.3 million from $5.1 million in first-half fiscal 2015.
Dividend
On Mar 16, 2016, the board of directors of Winnebago approved a quarterly dividend of 10 cents per share. The dividend will be paid on Apr 27, to stockholders on record as of Apr 13.
Zacks Rank
Winnebago currently carries a Zacks Rank #3 (Hold).
Some better-ranked automobile stocks include Wabash National Corp. WNC, Federal-Mogul Holdings Corporation FDML and Superior Industries International, Inc. SUP. All the three stocks sport a Zacks Rank #1 (Strong Buy).
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