Friday, March 17, 2006

Winnebago 2Q Profit Plummets 39 Percent

Winnebago Industries Inc., reported Thursday that second-quarter profit fell 39 percent on lower demand and prices for motor homes.

Net income for the quarter ended Feb. 25 declined to $7.7 million, or 23 cents per share, from $12.6 million, or 37 cents per share, a year ago. The latest quarter included 2 cents per share for stock option expense.

The Forest City, Iowa-based company's revenue fell 14 percent to $206.4 million from $239.4 million last year, citing lower motor home deliveries because of decreased industry retail demand and a shift to lower priced motor homes.

Winnebago CEO Bruce Hertzke said negative consumer confidence resulting from higher fuel costs and higher interest rates appear to have driven consumers to the lower cost motor homes.

"We saw consumer confidence coming up in November and December and we thought in the spring it would go back and take off and be more of a typical year," he said. "It's starting up really slow. I wish I could tell you why it's starting up slower than I thought it would and I think 90 percent of the industry anticipated."

Industry statistics from the Recreation Vehicle Industry Association, a trade group, indicated that sales of the top-of-the-line class A motor home shipments decreased 12.7 percent last year, while sales of the smaller class C units dropped just 1.7 percent. Full Story...

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