The 10-second takeaway
For the quarter ended June 30 (Q1), Arctic Cat beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share expanded. The profit was a surprise, as analysts had predicted a loss.
Margins grew across the board.
Arctic Cat recorded revenue of $111.3 million. The seven analysts polled by S&P Capital IQ looked for a top line of $99.0 million on the same basis. GAAP reported sales were 49% higher than the prior-year quarter's $74.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.14. The seven earnings estimates compiled by S&P Capital IQ averaged -$0.08 per share. GAAP EPS were $0.14 for Q1 compared to -$0.13 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 20.2%, 110 basis points better than the prior-year quarter. Operating margin was 2.8%, 760 basis points better than the prior-year quarter. Net margin was 1.8%, 490 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $225.4 million. On the bottom line, the average EPS estimate is $1.77.
Next year's average estimate for revenue is $671.2 million. The average EPS estimate is $2.76.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 73 members out of 107 rating the stock outperform, and 34 members rating it underperform. Among 27 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 18 give Arctic Cat a green thumbs-up, and nine 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 $46.17.
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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. The Motley Fool owns shares of Arctic Cat. 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.