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Wall Street Wanted 600% Earnings Gains From Polaris; It Posted a 900% Surge

By Rich Duprey - Apr 27, 2021 at 11:12AM

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The maker of powersports vehicles saw strong across-the-board gains.

Wall Street set the bar high for Polaris Industries' (PII -2.60%) first-quarter earnings results, forecasting the powersports vehicle manufacturer would post profits that soared 600% from the year-ago period.

The maker of ATVs, snowmobiles, and motorcycles went even further, though, recording adjusted earnings of $2.30 per share, a tenfold increase over last year's $0.22 and well ahead of analyst estimates of $1.56 per share.

Revenue of $1.95 billion also beat Wall Street's guess of $1.84 billion, and was up 38% from the year-ago figure of $1.41 billion.

Two snowmobile riders

Image source: Polaris Industries.

Interim CEO Mike Speetzen said that despite disruptions to its logistics and supply chain due to the pandemic and weather, Polaris delivered "results that exceeded our expectations" with sales growing by double-digit percentages.

Sales of off-road vehicles (ORVs) and snowmobiles were up 50%, motorcycle sales were up 31%, and its global adjacent markets -- its specialized military and commercial ORVs, quadricycles, and electric vehicles -- were up 27%. Sales of aftermarket parts rose 14%, and boat sales jumped 29%. All segments reported rising profits, too.

That led Polaris to raise full-year guidance, and it now expects adjusted net income to be in a range of $9.00 to $9.25 per share compared to its prior outlook of $8.45 to $8.75, and some 18% above the $7.74 it generated in 2020.

The sales outlook was also raised, and the company now forecasts revenue between $8.3 billion and $8.5 billion, up 18% to 21% year over year and ahead of its prior forecast of $7.95 billion to $8.15 billion.

Yesterday, though, Citi analyst Shawn Collins downgraded Polaris to neutral from buy, saying that with the stock up 58% in just seven months, it is almost fully valued.

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