The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Arctic Cat beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly, and earnings per share grew significantly.
Margins improved across the board.
Arctic Cat logged revenue of $207 million. The six analysts polled by S&P Capital IQ predicted revenue of $181.8 million. Sales were 36% higher than the prior-year quarter's $152.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
EPS came in at $0.92. The six earnings estimates compiled by S&P Capital IQ anticipated $0.59 per share. GAAP EPS of $0.92 for Q3 were 84% higher than the prior-year quarter's $0.50 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 23.1%, 160 basis points better than the prior-year quarter. Operating margin was 12.6%, 460 basis points better than the prior-year quarter. Net margin was 8.2%, 210 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $82.4 million. On the bottom line, the average EPS estimate is -$0.73.
Next year's average estimate for revenue is $544 million. The average EPS estimate is $1.22.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 53 members out of 84 rating the stock outperform, and 31 members rating it underperform. Among 24 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 14 give Arctic Cat a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Arctic Cat is outperform, with an average price target of $28.40.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.