Tuesday, 07 November 2017 07:10 AM
Research Desk Line-up: LCI Industries Post Earnings Coverage
LONDON, UK / ACCESSWIRE / November 7, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Polaris Industries Inc. (NYSE: PII), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PII, following the Company's announcement of its third quarter fiscal 2017 financial results on October 24, 2017. The motorcycle, snowmobile, and off-road vehicle specialist surpassed top- and bottom-line expectations and raised its outlook for FY17. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Recreational Vehicles industry. Pro-TD has currently selected LCI Industries (NYSE: LCII) for due-diligence and potential coverage as the Company reported on November 02, 2017, its financial results for Q3 2017. Register for a free membership today, and be among the early birds that get access to our report on LCI Industries when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on PII; also brushing on LCII. With the links below you can directly download the report of your stock of interest free of charge at:
http://protraderdaily.com/optin/?symbol=PII
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Earnings Reviewed
Polaris reported third-quarter 2017 sales of $1.48 billion, up 25% compared to sales of 1.19 billion for Q3 2016. The Company delivered North American unit retail sales growth of 13% and overall Company sales growth of 25%, approximately half of which was organic, while lowering North American dealer inventory 7% on a y-o-y basis. Polaris' revenue topped analysts' estimates of $1.40 billion.
During Q3 2017, Polaris' gross profit soared 40% to $364.0 million from $260.8 million in Q3 2016. As a percentage of sales, the Company's reported gross profit margin was 24.6% compared to 22.0% in the year-ago same period. Polaris' Q3 2017 gross profit included the negative impact of $7.6 million of Victory Motorcycles wind down costs and manufacturing network realignment costs of $6.2 million. Excluding these items, the Company's adjusted gross profit was $377.7 million, or 25.5% of sales, for the reported quarter, driven by increased volume, lower warranty, significant gross VIP cost savings, and positive product mix.
For Q3 2017, Polaris' operating expenses increased 19% to $265.2 million from $222.6 million in Q3 2016, which included $1.3 million in Victory wind down costs and $3.5 million of Transamerican Auto Parts (TAP) integration costs. The Company's income from financial services for the reported quarter totaled $18.1 million, down 6% compared to $19.2 million for Q3 2016.
Polaris reported net income of $81.9 million, or $1.28 per diluted share, in Q3 2017 compared to net income of $32.3 million, or $0.50 per diluted share, for Q3 2016. The Company's adjusted net income for the quarter ended September 30, 2017, was $1.46 per diluted share, up 192% compared to earnings of $0.50 in the year-ago same period and came in ahead of Wall Street expectations of $1.21 per share.
Polaris' Segment Results
During Q3 2017, the Off-Road Vehicle ("ORV") and Snowmobile segment's sales, including their respective Parts, Garments, and Accessories (PG&A) related sales, were $1.01 billion, up 12% over sales of $895.6 million for Q3 2016, driven primarily by improved side-by-sides shipments. The segment's gross profit surged 34% to $296.9 million, or 29.5% of sales, in the reported quarter, versus $221.6 million, or 24.7% of sales, in the year-ago comparable period.
The Motorcycle segment sales, including PG&A, totaled $155.1 million for Q3 2017, reflecting a 14% drop compared to sales of $181.2 million reported in Q3 2016, which included $39.4 million of Victory Motorcycle wholegood, accessory and apparel sales. The segment's gross profit was $10.4 million for the reported quarter compared to $20.3 million in the year earlier same quarter. Adjusted for the Victory Motorcycles wind down costs of $7.6 million, motorcycle gross profit was $17.9 million.
During Q3 2017, the Global Adjacent Markets segment's sales along with its PG&A related sales, advanced 17% to $91.6 million compared to $78.5 million in Q3 2016. The segment's gross profit dropped 27% to $16.0 million, or 17.5% of sales, in the reported quarter compared to $21.8 million, or 27.8% of sales, in the prior year's corresponding quarter. Adjusted gross profit, excluding the manufacturing realignment costs, grew 2% to $22.2 million, or 24.2% of sales, for Q3 2017.
The Aftermarket segment sales increased significantly to $224.7 million in Q3 2017 compared to $29.9 million in Q3 2016. TAP added $190.6 million to the segment sales in the reported quarter. The Aftermarket division's gross profit increased significantly to $63.2 million, or 28.1% of sales in the reported quarter, compared to $10.6 million, or 35.5% of sales, in the prior year's same quarter.
Financial Position and Cash Flow
Polaris' net cash provided by operating activities was $494.5 million for the nine months ended September 30, 2017, compared to $426.2 million for the same period in 2016. The increase in net cash provided by operating activities was due to the timing of accounts payable and accrued expense payments as well as collection of tax receivables. The Company's total debt at September 30, 2017, including capital lease obligations and notes payable, was $920.0 million.
Polaris' debt-to-total capital ratio was 51% at September 30, 2017, compared to 32% as on September 30, 2016, primarily due to the financing of the TAP acquisition. The Company's cash and cash equivalents were $132.3 million at September 30, 2017, up from $122.7 million for the same period in 2016.
Share Buyback Activity
During Q3 2017, Polaris repurchased and retired 257,000 shares of its common stock for $23.3 million. Year-to-date through September 30, 2017, the Company repurchased and retired 1,015,000 shares of its common stock for $88.9 million. As of September 30, 2017, Polaris had authorization from its Board of Directors to repurchase up to an additional 6.4 million shares of its common stock.
2017 Business Outlook
Polaris raised its sales guidance and expected earnings per share range for the full year 2017 from previously issued guidance. The Company now expects adjusted net income to be in the range of $4.75 to $4.85 per diluted share, compared with adjusted net income of $3.48 per diluted share for 2016. Full year 2017 adjusted sales are now anticipated to grow in the range of 18% to 19% over 2016 sales of $4.52 billion.
Stock Performance
At the closing bell, on Monday, November 06, 2017, Polaris Industries' stock declined 1.25%, ending the trading session at $115.28. A total volume of 1.10 million shares have exchanged hands, which was higher than the 3-month average volume of 840.51 thousand shares. The Company's stock price skyrocketed 30.29% in the last three months, 26.40% in the past six months, and 50.24% in the previous twelve months. Moreover, the stock soared 39.92% since the start of the year. The stock is trading at a PE ratio of 36.24 and has a dividend yield of 2.01%. The stock currently has a market cap of $7.31 billion.
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SOURCE: Pro-Trader Daily