Connect with us

BenzingaEditorial

Winnebago’s Profit Rises and Revenues Fall Less Than Expected

Published

on

Winnebago

Investors were optimistic heading into Winnebago Industry Inc‘s (NYSE:WGO) fourth-quarter earnings report as the company’s shares broke into a new 52-week high on Monday, hitting a peak of $43.01. And the investors sentiment was on the right track. The RV industry seems to be contracting following a nine-year record growth and although the leading outdoor lifestyle product manufacturer’s first annual sales decline was expected, revenues have fallen less than expected. And there’s the additional bonus being that Winnebago’s operating trends have been stronger than peers like Thor Industries (NASDAQ:THOR) through this industry slump.

Earnings report

The fourth fiscal quarter that ended on August 31, 2019 had revenues of $530.4 million. This is a 1.1% decrease compared to the same period in the fiscal 2018, which was $536.2 million. Gross profit of $83.2 million decreased 0.8% comparing to the same quarter of the 2018 fiscal year. But, the gross profit margin increased to 15.7% in the quarter due to a favourable mix from the accelerated growth of the towable segment, which had $307.0 million in revenues for the quarter, up 6.3% over the prior year. Operating income also decreased, 2% to be precise, comparing to the same quarter of the previous fiscal year, reaching $44.8 million for the quarter. However, the fourth quarter of the fiscal 2019 year had a net income of $31.9 million which is an increase of 7.0% compared to the same quarter last year.

The company’s bottom line was favourably impacted by an improved tax rate

The improved tax rate from the Tax Cuts and Jobs Act did help net income and earnings per share but they were also hit by $0.7 million of diligence costs from the Newmar acquisition that was announced in September and that resulted in $0.02 earnings per share drop.

The successful mix

The towable segment has continued its success route from the previous quarter when its sales went up 11% whereas its greatest rival Thor Industries dipped more than double, 23% percent to be exact. For the full Fiscal 2019, revenues for the Towable segment increased 6.2% from the previous year reaching $1.20 billion.

Other than profitably strengthening the company’s core business, Winnebago also managed to have a successful first year in the marine industry. Despite competition and industry headwinds, the company managed to deliver record profitability.

Concern

The motorhome division had a surprising 35% slump in the third quarter that management attributed to a production bottleneck. The manufacturing issue was resolved so that rate of decline was expected to improve to around 6%. If it reported a double digit, it would suggest more stubborn problems and not a hiccup. Well, overall, the segment’s fourth quarter revenues were 12.2% comparing to the same quarter of the previous year due to Class A and Class C weaknesses that managed to offset Class B’s improvement. As for the whole fiscal 2019, revenues dropped 17.9% from the previous year, reaching $706.9 million. Passing along tariffs in increased prices didn’t cause any problems before and the company still manages to offset them with its pricing strategy and favourable product mix coming from the shift to towable products with higher profit margins comparing to motor homes.

Competitive environment

Although Thor Industries Inc is moving upward, Winnebago’s rival is not as profitable when compared to its industry peers. Thor’s shares have a lot of mixed reviews despite its reasonable ROI potential, the company is just not doing so well after accounting for expenses. On the other hand, Polaris Industries (NYSE:PII) announced strong third quarter results on Tuesday causing its shares to go up 10.8%. The company’s sales exhibited a 7% year on year growth to $1.772 billion. For the full 2019 fiscal year, the company believes that it will achieve 12% sales growth which is the bottom of its previously expected range, while expecting an improvement in earnings, with the range being $6.20 to $6.30 per share. So, the market seems to have forgiven the company’s slight top-line miss due to its profitability.

Outlook

Winnebago needs innovative products released at a steady pace to keep the excitement going. Many find that the RV industry growth is slowing down as an indicator of the weakening global economy. Tariffs as well as increased costs of aluminium and steel surely won’t help. Investors will surely keep an eye to see whether the motorhome segment will stabilize and return to growth. The newly acquired Chris-Craft boat unit has its role in increasing capacity but it’s the company’s push of towable products that is protecting its profitability and helping it to thrive in a competitive environment.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com
Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

BenzingaEditorial

Are spaceflights just around the corner?

Published

on

Space Flights Stock Market

Virgin Galactic Holdings, Inc. (NYSE: SPCE), an aerospace company, pioneering in private space flights and manufacturing of advanced air and space vehicles, announced the Q4 and end of year results. Company’s key goal is to open access to space, so it is safe and affordable. Q4 brought the company closer to that goal by finalizing the transaction with Social Capital Hedosophia and becoming publicly listed on the NYSE. All of that affected further operational readiness of the Spaceport America in New Mexico, which is used by tenants like Virgin Galactic, TMD Defense and Space, White Sands Research and Developers and SpinLaunch.

White Sands Research and Developers LLC is based in Las Cruces, and it offers engineering and aerospace services like software development, flight modeling, systems engineering and suborbital launch services. TMD Defense and Space is based in El Paso and they plan to test ballistic missiles in Spaceport. SpinLaunch is a company aiming to move payloads to space with a spaceflight mass accelerator technology.

Tickets for space

Virgin Galactic, bringing Virgin branded customer experience, wants its customers to have a unique experience, lasting more than one day. Not all that time will be spent in space, but the spaceflight should provide real space adventure, views of the Earth and several minutes without gravity. All of this attracted just below 8.000 registrations of interest in flight reservations. This successful increase of interest registrations came after spending the last couple of years upgrading the spacecraft, which has now successfully flown two test flights to space, carrying five people in total (on both flights together).

These registrations of interest in flight reservations cost $1.000,00, and it represents refundable deposit securing a privileged position for future ticket purchase. Previous tickets were sold for $250.000, but we can expect that the company will increase the price, once they restart with ticket selling.

Q4 and 2019 results

When looking at these results, we should have in mind that the company spent several years in development, updating and upgrading its spaceship, with no ticket sales. Q4 revenues were $529,000, summing up to almost $3.8 million for the whole of 2019. That is an increase from 2018 revenues of $2.8 million but 2019 being its first full year of results. Taking into consideration huge research and development expenses, as well as similar SG&A, it is not a big surprise that the company showed a net loss of $73 million in Q4 or $210.9 million for the whole 2019 as it aims to be profitable by 2021. On the other hand, the company finished the year with cash and cash equivalents of $480 million as of December 31, 2019.

Outlook indicators

Virgin Galactic stocks rocketed in 2020. Investors seem to prefer riskier, more imaginative business endeavors. Similar goes for Tesla Inc (NASDAQ: TSLA) as Elon Musk’s SpaceX and even Boeing Co (NYSE:BA) who have their sights set even higher: that being  the moon and eventually Mars. Space travel somehow goes with futuristic electric cars, preferably even with autopilots. But in the meaning, current tech giants’ stocks like Google (NASDAQ: GOOG) and Amazon (NASDAQ: AMZN) with Bezos’ billionaire-backed venture Blue Origin are a trailing a bit, almost seeming as they are not interesting enough. But space flights do seem just to be around the corner.

Here are some interesting details which may give us a better idea  about when we can expect those spaceflights. Virgin Galactic started with the construction of astronaut training and flight preparation area by building the third floor at Spaceport America. The company also moved an additional 70 Virgin Galactic operations personnel from Mojave, CA to Spaceport America, bringing the total number of staff to 145. It also announced the $20 million investment by Boeing’s HorizonX Ventures, forming a strategic partnership. Future astronaut spacesuits will be made in cooperation with Under Armour (NYSE: UA), the company which also agreed to host the recently launched Astronaut Readiness program. All that activity cannot be without any reason. Hopefully, we will see how travel space looks like soon and maybe even gain an the International Space Station – and now that will even go beyond Harry Potter’s 9 and ¾ platform – no offence to J.K. Rowling intended!

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure .

IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Continue Reading

BenzingaEditorial

Monday and Tuesday’s Market Tumble – Who Is Affected

Published

on

Stock Market Tumble

The market is suffering from earthquakes as companies continue to warn about the impact of the COVID-19 virus. Tech juggernaut Apple (NASDAQ:AAPL) was among the first who has already warned of a shortage of iPhones but other US companies are also starting to break a sweat. If the impact is as serious as some investors suspect, it could derail the longest economic expansion in US’s history. That means there are political implications too. Even for US President Donald Trump has made a roaring economy a central part of his re-election bid and such wobbles could make his case for another four years more challenging. Travel companies around the world also continued to suffer. In the UK, among the FTSE 100 the greatest drop was suffered by EasyJet (OTC:ESYJY) , which sank 16.7%, while British Airways owner International Consolidated Airlines Group, S.A. (OTC:ICAGY) was down by more than 9%.

Latest effects on other stocks and markets

Which stocks and markets will suffer the most from the outbreak will depend on several factors, like where the virus will spread, the number of affected people, market position and what market mostly relies on the infected area, etc. Some markets may fight for a while, but eventually, they are bound to feel the impact. This means that the entire U.S. stock market could be exposed. The last few days have been full of heavy selling at a quick pace, and the market felt down for four days straight.  The S&P 500 index fell for approximately 3%, the Dow Jones Industrial Average for 3.15%, as well as NASDAQ composite for 2.8%. Some of the best ETFs also suffered some decreases. The iShares Expanded Tech-Software Sector ETF (IGV) dropped 2.8%, while the Innovator IBD 50 ETF (NYSE:FFTY) slipped 3%. The VanEck Vectors Semiconductor ETF (NYSE:SMH) had a similar result and lost 2.9%. These several days of heavy selling really placed the market under pressure on Monday and Tuesday, but after that tumble for several days, the indexes and indicators started coming back to normal and higher values.

Tesla Inc

Tesla Inc. (NASDAQ:TSLA) stock has been in a negative trend since the week began, and it  fell more than 7% on Monday, mainly due to fears of the spread of the pandemia and its effect on the world economy. Having in mind that one of three Tesla’s Gigafactories is in Shanghai, the virus outbreak might be a significant slowdown and temporary barrier for Tesla’s plans. Having in mind that the company is quite dependent on its China factory, while the competition has a little better diversification of its assets, Tesla might be more concerned than other auto manufacturers. This comes at a not-so-great time as Tesla has been working on meeting all the requirements to add its stocks to S&P 500 index in order to push its stock further.

Bob Chapek steps in as Disney’s new CEO

Prematurely stepping down of Disney’s (NYSE:DIS) long-serving CEO Bob Iger pushed Disney’s stocks to its lowest values since April 2019. First, the stock fell during Monday’s tumble for 4.3% and continued to decrease on Tuesday for 3.6%. Bob Chapek, who has led Disney Parks, Experiences and Products since 2018, will take over as CEO. The initial plan was that Iger resigns in 2021. But he will stay with the company, directing future “creative endeavors”.

Salesforce co-CEO also steps down

Keith Block, Salesforce’s (NYSE:CRM) co-CEO since 2018, announced he is stepping down, leaving the company founder Marc Benioff as the single CEO. This all came after several straight days of stock decrease. Maybe this was a surprise for some, since many saw Block as next in line as Salesforce’s sole CEO if Benioff decided to withdraw. The announcement also stated that Block will remain close to the company on advising position.

Outlook

The Fed sees the Coronavirus as the threat to global growth. Moreover, some analysts find it could burst some bubbles, as in the case of Tesla. Investors have been trying to make sense of what the coronavirus means for businesses since January, but many fear that the market has underestimated its impact and that we’re in for a severe correction.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure.

IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

Continue Reading

BenzingaEditorial

Technology Lesson for the New Era – Can You Do It Twice?

Published

on

Microsoft News

Whether we like it or not, the big tech firms have shaped our everyday lives and continue to influence them. But recent times have also brought increased legislation as lawmakers do their best to limit the power and influence of these companies. It remains to be seen whether they will succeed as there is an abundant range of both and the good that technology has brought into our existence. But what is interesting is that this constantly-changing landscape has one consistent theme. And that is companies that dominate one paradigm shift rarely dominate the next, even if they see them coming. It’s almost like saying that invention comes only once? Then again, there are some giants who might even manage to break this pattern.

The kingdom of PCs and Clouds and Mobiles

IBM (NYSE:IBM) saw PCs coming yet it outsourced the most valuable aspect of the technology to Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC). Microsoft and Intel in turn dominated PCs, yet they did not manage to do the same with the mobile market. And they saw it coming way before Apple (NASDAQ: AAPL) even introduced the iPhone – so well done to Steve Jobs. Apple has made us go crazy over the iPhone indeed but it has been relatively unsuccessful in the cloud sector compared to its competitors.

Can you see a pattern? Or not!

Focusing further on Microsoft and Apple as examples: Microsoft dominated PCs, missed in mobile, but retooled and is now a giant in cloud services. A giant so big that it has beaten Amazon (NASDAQ:AMZN)  in winning the Pentagon’s JEDI contract. Although Amazon is still determined in not letting happen and the judge stopped the contract from realisation until the lawsuit is resolved, the potential of Microsoft, the reason for which it was chosen, is undebatable.

Apple was a leader in very early PCs only to lose that battle to Microsoft and Intel, so it was able to retool its entire business to focus on mobile. But that ultimately made it difficult to build a big cloud business, even though Apple was early in offering cloud services to consumers. And now? Apple is repositioning  itself on being a service company. No need to feel sorry for Apple as it recently reported its record first quarter results. Will Apple TV Plus manage to eclipse the emperor Netflix (NASDAQ:NFLX) who also surpassed expectations for its latest quarter, along with intense competition from Disney (NYSE:DIS) and others is an entirely different question! And all bets are in!

The takeaway

These companies were built with an idea to disrupt the status quo but the truth is that they are back at square one when the next shift begins. And the pace is only getting quicker.  In the end, they also find themselves asking the same questions as the companies they disrupted before- why change everything about your disrupt your highly profitable core? That core business is afterall, one’s ‘baby’. So to make it less painful, it seems the best thing to do is shift the direction immediately after it’s become apparent you’ve lost just one round and leapfrog to a new one that you can build a business around. Baby steps are key, even for giants as this can only make them flexible enough to follow through change.

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be send to ivana@iamnewswire.com

Continue Reading

Trending

Copyright © 2019 IAM Newswire. Market News, Insights, surveys and more.