New Products, Long Winter Drive Polaris to Record Profits
Polaris Industries, Inc., reported record first-quarter revenue and earnings on Tuesday, due in part to the extended winter weather.
Polaris announced that net earnings for the first quarter, which ended March 31, totaled $75.5 million, or $1.07 per share, up 26 percent from $60 million, or $0.85 per share, during the same period in 2012. Earnings per share were $0.06 higher than what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, increased 11 percent to $745.9 million, up from $673.8 million in the first quarter of 2012. Despite the increase, revenue was below analysts’ projections of $751.5 million.
The most significant change was in the company’s snowmobile business, in which revenue increased 217 percent. According to Polaris, the whole North American snowmobile industry had a strong season due to higher snowfall levels and a much later snow cover compared to last year’s warm and short winter.
Polaris also saw a 7 percent increase in revenue in its largest segment, off-road vehicles, from the first quarter of 2012. New products, including mid-size utility vehicles like its Ranger XP 900, largely drove the increase.
Revenue declined 3 percent, however, in the company’s on-road vehicle segment, which includes the Victory motorcycle brand. While Polaris attributed its successful snowmobile sales to the extended winter, the company said the weather also contributed to the decline in its motorcycle business.
Looking forward, Polaris increased its 2013 full-year earnings and revenue projections. The company now expects full-year 2013 earnings to be around $5.05 to $5.20 per share, up from its previously projected $4.85 to $5.05. The new forecast represents an increase of 15 to 18 percent from 2012 earnings, which totaled $4.40 per share. Polaris said it now expects sales for the year to grow around 12 to 15 percent, up from its previously projected increase of 7 to 10 percent.
Shares of Polaris' stock were trading up about 1.4 percent at $86.45 during late Tuesday morning trading.
Polaris has expanded significantly during the last few years; it most recently announced the acquisition of the French automobile manufacturer Aixam Mega S.A.S.
“Two key tenets of Polaris’ long-term strategy are growing globally and growing through adjacencies,” CEO and Chairman Scott Wine said in a Tuesday statement. “Our acquisition earlier this month of Aixam Mega S.A.S., a profitable European on-road quadricycle business, aligns perfectly with those two objectives and furthers our penetration into the $4 billion-plus global small vehicles market.”
Wine also announced that Polaris will open a new European manufacturing facility in Opole, Poland. The facility is meant to serve the company’s European markets with locally designed and manufactured products, according to Wine. Polaris expects the facility to be operational by the fall of 2014.
The company also launched its Brutus and Bobcat utility vehicles during the first quarter, demonstrating its growing focus on the commercial vehicle market.
Twin Cities Business' May issue takes an in-depth look at how Polaris, which began as a snowmobile maker, is now the number one powersports company in the United States—and speeding toward becoming a global small-vehicle manufacturer. To read the full story, click here.
Polaris is among Minnesota’s 20 largest public companies based on revenue, which totaled $3.2 billion in 2012.