On Wednesday, Arctic Cat (NASDAQ:ACAT) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

More than most businesses, Arctic Cat depends on the weather to provide enough winter snow to drive sales of its snowmobiles. After some difficult seasons in past year, the company has hoped to rebound with a return to more normal conditions. Let's take an early look at what's been happening with Arctic Cat over the past quarter and what we're likely to see in its quarterly report.

Stats on Arctic Cat

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$121.2 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How did Arctic Cat's winter fare?
Analysts have kept their views stable in recent months on Arctic Cat's earnings, leaving estimates for the March quarter unchanged while cutting fiscal-year 2014 projections by $0.02 per share. But the stock has performed very well, climbing more than 30% since early February.

Winter has been kind to Arctic Cat and a number of other companies that rely on snow for their business. Ski-resort operator Vail Resorts (NYSE:MTN) got out to a slow start this season, leading to an earnings shortfall for its January quarter, but better snow totals later in the season have sent its stock rising sharply. Arctic Cat hopes to benefit from the same conditions.

Yet the March quarter is traditionally a slow period for Arctic Cat because of its concentration on snowmobiles. The company also makes all-terrain vehicles in an attempt to diversify its seasonal exposure, but rival Polaris (NYSE:PII) has done a far better job of building out an all-season lineup of vehicles that includes not only snowmobiles and ATVs but also motorcycles. For its part, Polaris reported record first-quarter sales late last month, and a rise of more than 200% for its snowmobile segment's revenues suggests that Arctic Cat investors should expect solid sales as well.

One promising area for Arctic Cat to grow is in international markets. Given the company's small size, the opportunity from lucrative markets like Canada and northern Europe would be extremely meaningful in boosting the company's snowmobile revenue, and greater ATV penetration could help smooth its sales throughout the year.

In Arctic Cat's quarterly report, be sure to compare its figures closely with those of Polaris. If Arctic Cat can emulate the success of its rival in broadening its customer base, it could go a long way toward justifying the big jump in its shares recently.

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