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Winnebago (WGO) Earnings Beat Estimates in Q3, Revenues Down

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Winnebago Industries Inc. (WGO - Free Report) reported earnings of $1.14 per share in the third quarter of fiscal 2019 (ended May 25, 2019), beating the Zacks Consensus Estimate of $1.05. In the year-ago period, earnings were $1.02 a share. Net income rose 11.2% year over year to $36.2 million. Earnings were positively impacted by an improved tax rate arising from Tax Cuts and Jobs Act (TCJA) and a change in estimates related to R&D tax credits.

Revenues in the reported quarter declined 5.9% to $528.9 million. The figure lagged the Zacks Consensus Estimate of $556 million.

Operating income in the quarter under review rose 1.4% to $49 million. Gross profit improved to $86.6 million from $85.5 million a year ago.

Winnebago Industries, Inc. Price, Consensus and EPS Surprise

 

Winnebago Industries, Inc. Price, Consensus and EPS Surprise

Winnebago Industries, Inc. price-consensus-eps-surprise-chart | Winnebago Industries, Inc. Quote

Segment Results

Revenues at the Motorized segment were down 34.6% to $160.2 million from a year ago. Adjusted EBITDA declined 96.7% to $0.4 million.

Revenues at the Towable segment improved 10.8% to $346.8 million year over year. The upside was driven by strong organic growth across the Grand Design RV brand. Adjusted EBITDA was $57.2 million, up 26% from the prior-year quarter.

Financial Position

Winnebago had cash and cash equivalents of $4.2 million as of May 25, 2019, compared with $39 million as of May 26, 2018.

For the first nine months of fiscal 2019, the company’s cash flow from operations was $82.8 million, a rise of 21.8 million from the same period in fiscal 2018.

In a year’s time, shares of Winnebago have outperformed the  industry it belongs to. Its stock fell 13.7% in comparison with the industry’s decline of 47.2%.

Zacks Rank and Stocks to Consider

Winnebago currently has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Gentex Corporation (GNTX - Free Report) , Fox Factory Holding Corp. (FOXF - Free Report) and Cummins Inc. (CMI - Free Report) , each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Gentex has an expected long-term growth rate of 6%. Over the past six months, shares of the company have gained 19%.

Fox Factory has an expected long-term growth rate of 16.4%. Over the past six months, shares of the company have gained 42.6%.

Cummins has an expected long-term growth rate of 8%. Over the past six months, shares of the company have gained 31%.

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