Polaris Industries (PII) reported on
Tuesday that its second-quarter earnings rose 15 percent, as the maker of
all-terrain vehicles, snowmobiles and motorcycles benefited from higher prices
that boosted sales growth past expectations.
The company also raised its full-year outlook to earnings of
$5.20 to $5.30 a share and sales growth of 13 percent to 15 percent. In April,
its forecast called for $5.05 to $5.20 a share on a sales increase of 12
percent to 15 percent.
Polaris has posted double-digit percentage growth in profit
and revenue for over three years, largely due to strong demand for its off-road
vehicles and motorcycles in North America. In
March, the Minnesota-based company acquired A.M. Holding, which operates under
the name Aixam Mega, to expand its footprint in Europe.
Polaris is also nearing its full
re-launch of Indian Motorcycles, an iconic brand that several companies have
tried to revive since its bankruptcy in 1953. Polaris acquired the
motorcycle company in 2011, and Indian will reveal its new 2014 Chief on Aug. 3
at the Sturgis Motorcycle Rally in Sturgis,
SD. The bike will also make an
appearance two days later on the History Channel's "American Pickers."
For the latest period, the company recorded a profit of $80
million, or $1.13 a share, up from $69.8 million, or 98 cents a share, in the
year-ago period. Analysts were looking for per-share earnings of $1.10 a share.
Sales climbed 12 percent to $844.8 million, beating
expectations for $839 million.
Gross margin widened to 29.9 percent from 28.7 percent,
thanks to higher selling prices and continued efforts to reduce product costs.
However, total operating expenses increased 21 percent year-over-year,
primarily as a result of sales and marketing costs related to the upcoming
"In the coming weeks we will introduce some of the most
exciting products in our history, which we expect will accelerate retail growth
for the remainder of the year and beyond," Polaris Chairman and CEO Scott Wine
said in a statement, referring to the 2014 Chief as "perhaps the most eagerly
anticipated new product launch in the company's history."
Wine said Polaris will also unveil new off-road vehicles
next week at the company's dealer meeting.
Off-road vehicle sales, the largest contributor to revenue,
rose 6.6 percent to $619.2 million.
Sales of motorcycles fell 6.1 percent to $49.9 million,
while small-vehicle sales jumped to $33.7 million from $11.6 million last year.
Snowmobile sales decreased 4.6 percent to $8.5 million.
Sales of parts, garments and accessories grew 33 percent to
Shares jumped 4.4 percent to $108.00 in late morning
trading. As of Monday's close, the stock was up nearly 44 percent over the last