Polaris Industries Inc. today reported record third quarter net income of $67.6 million for the quarter ended Sept. 30, up 43 percent from the prior year’s third quarter net income of $47.2 million.
Sales for the third quarter 2011 totaled a record $729.9 million, an increase of 26 percent from last year’s third quarter sales of $580.1 million.
“Despite challenging economic conditions, we are pleased to report another record quarter of sales, net income and earnings per share,” Polaris CEO Scott Wine said. “I am exceptionally proud of how the Polaris team continued to drive growth and productivity in the third quarter. Each of our businesses experienced strong sales growth in the period, primarily driven by sustained market share gains. North American consumer retail demand for Polaris products remains vital, increasing 16 percent. We also once again improved our profitability, with healthy gross profit margin and net income margin increases when compared to last year.”
Wine also announced that the company’s Monterrey, Mexico manufacturing facility shipped its 10,000th side-by-side in the quarter. Wine also said that integration of Global Electric Motorcars (GEM) and Indian Motorcycle Company “is progressing according to plan, providing us with exciting new growth platforms.”
Polaris also raised its previously issued sales and earnings guidance and now expects full year 2011 earnings in the range of $3.10 to $3.16 per diluted share, an increase of 45 to 48 percent over full year 2010 earnings. Full year 2011 sales are now expected to grow in the range of 30 to 32 percent from 2010.
“Given our year-to-date results, the positive momentum exhibited by our businesses, and the strong performance of our 2012 model year products introduced earlier this year, we are raising our full year 2011 sales and earnings expectations,” Wine said. “We expect 2011 will be a record year for Polaris, demonstrating our commitment to making growth happen in spite of adverse economic conditions.
“Looking ahead to 2012, we expect the overall economic climate to remain challenging. However, we believe our business is well positioned to offset these headwinds, as we continue to execute our successful long-term strategy, invest in product innovation, and seize additional opportunities to sustain our momentum. While our current success means the sales and earnings comparisons will be much tougher in 2012, at this early stage we expect to have another year of increasing sales, net income and earnings per share.”
Snowmobile sales for third quarter 2011 were $95.1 million, an increase of 23 percent over third quarter 2010. These results reflect significantly reduced snowmobile dealer inventory levels entering the 2011-12 selling season compared to the prior year, as well as the benefit of more higher priced snowmobiles shipping during the 2011 third quarter than in third quarter 2010.
On-Road Vehicle sales totaled $35.7 million, 77 percent higher than the same period in 2010, primarily due to Victory motorcycle sales increases. Sales of On-Road Vehicles to customers outside of North America increased 74 percent compared to the prior year’s third quarter.
Third quarter North American heavyweight cruiser and touring motorcycle industry retail sales were up mid-single digits percent over the prior year’s third quarter, while Victory unit retail sales in North America increased upper-teens percent during the same period, according to the company. A modest amount of On-Road Vehicle sales related to the GEM and Indian Motorcycle Company acquisitions were recorded in the third quarter 2011.
PG&A sales increased 21 percent during the third quarter 2011 to $112.9 million compared to the same period last year, with PG&A sales increasing across all businesses and geographies. During the 2011 third quarter Polaris introduced more than 200 new accessories and garments to the PG&A product line for the 2012 model year.
International sales totaled $97.9 million for the 2011 third quarter, a 59 percent increase over the same period in 2010. All regions and product lines experienced growth during the quarter driven by higher volume, and increased sales of higher priced side-by-side vehicles and motorcycles, according to the company. Year-to-date, international sales totaled $293.2 million, an increase of 37 percent over the same period last year.
Income from financial services increased to $6.3 million during third quarter 2011 from $4.1 million in the third quarter of 2010, primarily due to increased profitability generated from the retail credit portfolios with GE, HSBC and Sheffield, according to the company.
Look for more coverage of the Polaris third quarter earnings results in an upcoming edition of Powersports Business.
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