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Thor Industries (THO) Q3 Earnings Miss Estimates, Rise Y/Y

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Thor Industries, Inc. (THO - Free Report) reported third-quarter fiscal 2018 (ended Apr 30, 2018) adjusted earnings of $2.53 per share, missing the Zacks Consensus Estimate of $2.65. However, adjusted earnings increased almost 20% from the year-ago figure of $2.11. Net income rose to $133.8 million from $111.3 million in the prior-year quarter.

Revenues rose 11.7% year over year to $2.25 billion and outpaced the Zacks Consensus Estimate of $2.2 billion.

Gross profit increased 7.8% to $316.7 million from $294 million in third-quarter fiscal 2017. The gross profit margin decreased to 14.1% compared with 14.6% in the year-ago quarter, due to increased costs, primarily associated with extended warranty expenses on certain products and slightly higher labor as well as material costs.

Thor Industries, Inc. Price, Consensus and EPS Surprise

Segment Results

Sales of Towable RVs went up 12.8% year over year to $1.61 billion. Pre-tax income shot up 9.9% to $147.9 million from $134.5 million in the comparable quarter last fiscal. Growth in the metric was backed by higher sales, decreased selling, general and administrative (SG&A) expenses, and slightly lower amortization expenses, partly offset by a lower gross margin.

Sales from Motorized RVs improved 8.8% to $598.5 million from $549.9 million in the year-ago quarter. Pre-tax income from the segment surged 4.2% to $38.9 million from $37.4 million a year ago, driven by higher sales, partly offset by a lower gross margin.

Financial Position

Thor Industries had cash and cash equivalents of $147 million as of Apr 30, 2018, down from $223.3 million as of Jul 31, 2017. Long-term debt was $80 million as of Apr 30, 2018, compared with $145 million recorded on Jul 31, 2017.

In the first six months of fiscal 2018, Thor Industries’ operating cash inflow increased to $197.2 million compared with $182.8 million during the same period in the previous fiscal.

Zacks Rank & Stocks to Consider

Thor Industries currently sports a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. (ALSN - Free Report) , Navistar International Corporation and Oshkosh Corporation (OSK - Free Report) . Presently, each of these stocks carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have risen 13.4% over the past year.

Navistar has an expected long-term growth rate of 5%. Shares of the company have risen 31.5% over the past year.

Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 13.8% over the past year.

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