Polaris’ Q3 Sales Eclipse $1B, Co. Adds New Products
Polaris Industries, Inc., on Tuesday reported record third-quarter sales, surpassing $1 billion in quarterly revenue, driven by higher selling prices, lower product costs, and a continuous stream of new product lines.
“Our record third-quarter results reflect both the ongoing demand for our existing products and the potential contained within the initial shipments of our model-year 2014 vehicles, the largest new product introduction in the company’s history,” CEO and Chairman Scott Wine said in a statement.
Medina-based Polaris announced that net earnings for the third quarter, which ended September 30, totaled $117 million, or $1.64 per share, up 24 percent from $94 million, or $1.33 per share, during the same period in 2012. Earnings per share were $0.03 higher than what analysts polled by Thomson Reuters had expected.
Revenue, meanwhile, totaled $1.1 billion, up 25 percent from $880 million in the third quarter of 2012. Third-quarter revenue was above analysts’ projections of $1.05 billion.
According to Wine, the company’s large-scale rollout of new products was led by the re-launch of Indian Motorcycles, which featured the introduction of three all-new 2014 models: the Chief Classic, Chief Vintage, and the Chieftain.
Additionally, Polaris launched new variations of the company’s Rangers, RZRs, and Victory motorcycles—and it also said it released more than 300 new model 2014 accessories and an extended apparel line-up.
“While the new model-year 2014 vehicles and accessories are just now arriving at dealers in meaningful quantities, the initial feedback has been extremely positive from consumers to the trade magazines,” Wine said.
According to Polaris, its increase in profit primarily came from its “continued product cost reduction efforts and higher selling prices, offset somewhat by higher promotional costs.”
Snowmobile sales increased by 25 percent, off-road vehicles by 23 percent, and parts and accessories sales by 37 percent.
Polaris saw significant growth in its international business, in which sales rose by 38 percent; part of the growth was driven by the company’s recent acquisition of the French maker of small vehicles Aixam Mega S.A.S.
Polaris continued to expand internationally with a contract made in September to sell ultra-light tactical vehicles to the German Army. Because special units will be using the vehicles, a company spokesperson told Twin Cities Business last month that the value of the contract and the number of vehicles involved would not be disclosed. Polaris also sells the same vehicles, MV850s, to U.S. Special Forces and military allies, as well as to law enforcement agencies.
More recently, multiple news outlets, citing Managing Director of Polaris India Pankaj Dubey, reported that the company introduced an off-road ambulance based on Polaris’ Ranger 6X6 800 model. The ambulance was developed by Polaris and a third-party specifically to handle rough terrains and conditions like those throughout Indian regions where medical help is in high demand.
“Polaris off-road ambulances are apt for supplying medical supervision in rural India and calamity-stuck regions, as they are capable of clearing roads, or handling fire in narrow streets,” Dubey reportedly said.
On its record sales, Polaris bumped up its full-year earnings expectations from between $5.20 and $5.30 per share to between $5.30 and $5.37 per share.
“Our sales growth continues to outpace our long-term projections and we now expect to achieve greater than $8 billion in sales by 2020, while our net income target remains at an industry leading greater than 10 percent of sales by 2020,” Wine said. “While we are obviously very bullish about Polaris’ future, we remain focused on near-term execution and are confident in raising our sales and earnings expectations for 2013.”
While revenue and earnings shot up, shares of Polaris’ stock were actually trading down about 3.8 percent at $130.9 Tuesday afternoon.
For an in-depth look at Polaris’ recent growth, click here.