Analyst says RVs outperforming motorcycles in US market
Wed Oct 6, 2010
Source: Stockcall/Thor Industries
Internet based financial website stockcall.com says that RV companies are outperforming motorcycle manufacturers in the fight for your discretionary income. Recreational vehicle makers are currently battling consumer spending and foreign manufacturers, however, a few bright spots for the industry remain. Motorcycles have been the hardest hit while some RVs are finding new types of clientele.
In addition to reduced recreational spending, U.S. motorcycle makers like Harley-Davidson Inc. (NYSE: HOG) are facing additional pressure from Japanese manufacturers. U.S. manufactures have seen their foothold in the bike market decrease steadily for years. Lately, major bike makers have scaled back production and reduced full-time employees but a lack of demand has still led to share prices falling despite these recent cost cutting efforts.
Conversely, RVs and towed vehicles are faring slightly better than motorcycles. RV makers like industry giant Thor Industries Inc. (NYSE: THO) have been able to absorb decreases in spending better because of a much wider demographic of customers. In the United States, Harley-Davidson owners are typically white middle-aged males and fewer than 11% of all owners are female. RV owners are much more diversified and some newly retired customers see RVs as a viable and cheaper retirement option.
Thor recently announced results for the fourth quarter and year ended July 31, 2010. Sales for the quarter were $663,788,000, up 51% from $440,924,000 last year. Net income for the quarter was $40,600,000, up 64% from $24,781,000 last year. Basic earnings per share (E.P.S.) for the quarter were 78 cents versus 45 cents last year.
Sales for the year were $2,276,557,000 up 50% from $1,521,896,000 last year. Net income for the year was $110,064,000, more than six times the $17,143,000 of net income last year. Basic E.P.S. for the year were $2.08 versus 31 cents last year.
"I am particularly proud of our improved margins which reflect Thor's cost-cutting and process efficiency efforts and have resulted in our quarterly and annual earnings being well in excess of analyst consensus estimates," said Peter B. Orthwein, Thor chairman. "Our bus segment continues to be performing well amidst tenuous market conditions. Thor's September 2010 acquisition of Heartland RV, coupled with our strong cash position and no outstanding debt, will help fuel additional growth and shareholder value in 2011 and beyond."
