ATV Sales Hurting Arctic Cat (ACAT, PII)

Arctic Cat Inc. (NASDAQ: ACAT) is seeing shares come off the tracks in after-hours trading after the company previewed poor results.  The company places the blame on on lower than anticipated all-terrain vehicles sales.  This is attributed to continued weak retail sales, the reduction of a large planned retail customer order, and finally on a parts supply issue.

Arctic Cat now expects fourth-quarter diluted EPS of $0.00 to -$0.08 and net sales are now estimated to be $167 million to $169 million compared to $172.6 million in the prior-year fourth quarter.  First Call had estimates of $0.23 EPS and $198.9 million in revenues.  Analysts had only taken this down by $0.01 over the last ninety-day period, although analysts were mostly cautious anyway on this one.

The company now see reporting a net loss for the March 31, 2008 fiscal year in the range of $0.20 to $0.28, compared to year-ago diluted EPS of $1.15.

Shares are down some 18% at $6.01 in after-hours trading after closing up less than 1% at $7.37 in regular trading.  That will also be a new 52-week low under the prior $6.81 low if this holds.  While this would be easy to keep bashing, Arctic Cat’s stock had already sold off roughly 65% since last summer’s highs and are down far worse than this since early 2005.

Shares of larger competitor Polaris Industries, Inc. (NYSE: PII) are also lower by more than 2% at $42.75 in after-hours trading, after it also closed up nearly 1% in regular trading.

Jon C. Ogg
April 8, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at [email protected] and he does not own securities in the companies he covers.