Arctic Cat (NASDAQ:ACAT) reported fourth-quarter and 2006 earnings last Thursday: not a pretty sight. The company had previously warned that sales would come in around the $153 million range, and earnings would be ($0.03) to ($0.05), in contrast to analysts' expectations of $160 to $170 million and a $0.09 to $0.13 profit per share. Well, the company made its estimates, coming in at $153.3 million in revenue and a loss of $0.03 cents a share, or $592,000. Talk about a hollow victory -- yeesh. (Actually, no, the hollow victory would be losing market share to competitor Polaris (NYSE:PII).)

The company blamed the miss on weather, namely the lack of snow, and -- as Rich Smith said in the earnings preview last week -- was entirely justified in doing so. Snowmobile sales were a measly $140,000 in the fourth quarter, versus $10.4 million the year before. Not surprisingly, inventories were up 35% year over year. Maybe that performance cost one person his job, since Robert Bonev, who had been their VP of Sales and Marketing since 2001, left the company last week.

To add insult to injury, the company lowered first-quarter 2007 earnings and full-year results earnings considerably. This does not sound like a company that is having fun in the snow. The company now expects revenues between $85 and $95 million, versus $107 million a year earlier, and a loss of $0.27 to $0.31 per share. However, the company is shifting production of snowmobiles to the second and third quarters, so presumably the sales will be made up. Full-year results are expected to grow only 3% to 6% to $754 million to $776 million, and earnings are expected at $1.13 to $1.19 versus analyst expectations of $764 million and earnings of $1.32 a share.

Overall, the company's fiscal 2006 results were quite poor. Taking into account the revised 2007 forecast, profits will have declined for three consecutive years, and while revenues have grown, margins will have continued their downward trend. Even at the current price, this doesn't sound like a company that I'd want to build a snowman around, let alone my portfolio.

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Fool contributor Stephen Ellis does not own shares of any companies mentioned.