Officials at Forest City-based Winnebago Industries say the company posted a weak third quarter as a result of the sluggish economic recovery. The nation’s largest motor home maker posted a quarterly profit and revenue well below the expectations of Wall Street.
Winnebago’s March-through-May net income dropped to $1.2 million, or four cents a share, from six million dollars, or 21 cents a share, a year ago. Revenue rose slightly to $135.6 million. Analysts were expecting earnings of 13 cents a share on revenue of $151.4 million.
Winnebago C.E.O. Bob Olson says despite not meeting expectations, the company kept its streak alive of profitable quarters. He says the bottom line is that the company was still profitable and that it makes five quarters in a row showing a profit for the company.
He says the biggest thing he’s disappointed in is the economy. He reminds everybody that Winnebago would have enjoyed a profitable quarter a couple of years ago when there was a downturn in the RV industry. Olson says he remains concerned that the current recovery of the economy appears to be slowing.
“At the end of 2010, I really though that the recovery was starting to gain legs, not only for us but for the RV industry, and more importantly the U.S. economy,” Olson says. He says with the unrest in the Middle East and gas prices rising, it pushed everybody into a “pull-back” mentality.
Olson says the profit shows that people are still interested in owning motors homes. “There’s a lot of people in the country that absolutely love the lifestyle,” Olson says. He says campgrounds are still full, people are still using their products, and people are instilling the “RV lifestyle” in generations to come.
Olson expects the industry to continue to be popular. He says as more people get on the health kick, there are some studies that show the RV vacationing is more physical and promotes better eating habits, helping the industry. Winnebago stock tumbled at the start of today’s session, going from Wednesday’s close of $11 even to $8.63 a share just before 11:30 A.M., a drop of over 21%.
By Bob Fisher, KRIB, Mason City