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Thor (THO) Stock Down 4.4% on Q2 Earnings & Revenue Miss

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Thor Industries, Inc. (THO - Free Report) reported second-quarter fiscal 2019 (ended Jan 31, 2018) adjusted earnings of 65 cents per share, missing the Zacks Consensus Estimate of 88 cents. Excluding acquisition-related costs, the company reported loss of 10 cents per share in the quarter under review versus prior-year earnings of $1.51. Quarterly income was significantly affected by an unusually high effective tax rate. The company's second-quarter effective tax rate was 389.1% compared with 43.5% a year ago.

Shares of Thor have lost 4.4% in yesterday’s trading session after the earnings release.

In the quarter under review, revenues slumped 34.5% year over year to $1.29 billion. The figure also lagged the Zacks Consensus Estimate of $1.48 billion.

Gross profit was $141.6 million compared with $270.3 million recorded in second-quarter fiscal 2018. Gross profit margin contracted 270 basis points to 11% from the year-ago quarter. This was mainly due to lower sales and increased sales promotions.

Thor Industries, Inc. Price, Consensus and EPS Surprise

 

Thor Industries, Inc. Price, Consensus and EPS Surprise | Thor Industries, Inc. Quote

Segment Results

Sales of Towable RVs fell 35.8% year over year to $881.6 million. The slump was due to lower unit volume. Higher discount level along with slightly increased warranty costs lowered the segment’s gross profit margin to 10.9% from a year ago.

Sales from Motorized RVs declined 33.7% year over year to $371.5 million due to lower unit sales. Consequently, the segment’s gross profit margin declined to 9.8% on a year-over-year basis.

Financial Position

As of Jan 31, 2019, Thor had cash and cash equivalents of $305.8 million, up from $275.2 million on Jul 31, 2018.

Zacks Rank & Stocks to Consider

Thor currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Zacks Construction space are Jacobs Engineering Group Inc. , Altair Engineering Inc. (ALTR - Free Report) and EMCOR Group, Inc. (EME - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Jacobs, Altair and EMCOR’s 2019 earnings are expected to grow 18.2%, 58.6% and 6.9%, respectively.

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