Arctic Cat Earnings Preview (ACAT)

Arctic Cat Earnings Preview

By Motley Fool Staff | More Articles
January 24, 2012 | Comments (0)

Investors are on the edges of their seats, hoping that Arctic Cat (Nasdaq: ACAT ) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings on Thursday, Jan. 26. Arctic Cat operates, designs, engineers, manufactures, and markets snowmobiles and all-terrain vehicles (ATVs), as well as related parts, garments and accessories under the Arctic Cat brand name.

What analysts say:

Buy, sell, or hold?: The majority of analysts back Arctic Cat as a buy. But with 66.7% of analysts rating it a buy, Arctic Cat is still below the mean analyst rating of its nearest seven competitors, which average 76.5% buys. Analysts don't like Arctic Cat as much as competitor Polaris Industries overall. Ten out of 11 analysts rate Polaris Industries a buy compared to four of six for Arctic Cat. Analysts' rating of Arctic Cat has stayed constant from three months prior.
Revenue Forecasts: On average, analysts predict $181.8 million in revenue this quarter. That would represent a rise of 19.6% from the year-ago quarter.
Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.58 per share. Estimates range from $0.56 to $0.61.

What our community says:
The majority of CAPS All-Stars see ACAT as a good bet, with 58.3% granting it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars as 65.5% give it an "outperform" rating. Fools are keen on Arctic Cat, though the message boards have been quiet lately with only 47 posts in the past 30 days. Arctic Cat's bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
The company's revenue has now risen for two straight quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter	Q2	Q1	Q4	Q3
Gross Margin	27.9%	19.1%	9.2%	21.5%
Operating Margin	16.1%	(4.8%)	(19.8%)	8.0%
Net Margin	10.5%	(3.1%)	(13.0%)	6.1%

For all our Arctic Cat-specific analysis, including earnings and beyond, add Arctic Cat to My Watchlist.

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