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BRP (DOOO) to Report Q2 Earnings: What's in the Offing?

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BRP Inc. (DOOO - Free Report) is slated to release second-quarter fiscal 2022 results on Sep 2, before market open. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $1.04 per share on revenues of $1.34 billion. The company registered higher-than-anticipated earnings in the last reported quarter.

BRP beat estimates in each of the preceding four quarters, the average surprise being a whopping 482.38%.This is depicted in the chart below:

BRP Inc. Price and EPS Surprise

BRP Inc. Price and EPS Surprise

BRP Inc. price-eps-surprise | BRP Inc. Quote

Trend in Estimate Revisions

The Zacks Consensus Estimate for BRP’s fiscal second-quarter earnings per share witnessed a downward revision of 3 cents to $1.04 per share in the past 30 days. Nonetheless, this compares favorably with the year-ago quarter’s earnings of 83 cents per share, indicating a 25.3% rise, year on year. Also, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year jump of 48.78%.

Earnings Whispers

Our proven Zacks model does not conclusively predict an earnings beat for BRP this time around. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the odds of an earnings beat. However, that is not the case here as elaborated below.
Earnings ESP: BRP has an Earnings ESP of -4.83%. This is because the Most Accurate Estimate is pegged 5 cents below the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BRP, peers of which include Winnebago (WGO - Free Report) , Thor Industries (THO - Free Report) and Polaris Inc (PII - Free Report) , currently holds a Zacks Rank of 4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

BRP’s sales in the fiscal second quarter are expected to have been affected by the global semiconductor chip dearth grappling the auto sector. Amid the global semiconductor chip shortage, BRP is likely to have witnessed limited retail growth during the quarter under review. Tight availability for certain materials and parts, particularly semiconductors, is forcing the company to retrofit some products before being shipped out. This might have delayed the timing of certain deliveries during the fiscal second quarter, thus negatively impacting the company’s quarterly performance.

BRP’s Powersports retail sales in North America are expected to have witnessed a significant decline during the fiscal second quarter, mainly due to low network inventory and the impact of supply-chain constraints. This is likely to have eroded the company’s top line during the quarter.

The recreational vehicle maker’s elevated capex and research and development (R&D) expenses on advanced technologies for the development of new vehicle models might have further dented its fiscal second-quarter margins. Also, the increase in prices of commodities like aluminum and wood is expected to have further hurt the company’s quarterly performance.

In-Depth Zacks Research for the Tickers Above

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Thor Industries, Inc. (THO) - free report >>

Polaris Inc. (PII) - free report >>

Winnebago Industries, Inc. (WGO) - free report >>

BRP Inc. (DOOO) - free report >>