Credit: Polaris Industries,

Polaris Industries (NYSE:PII) is set to release third-quarter results later this week. With shares of the off-road vehicle specialist down nearly 20% since its last quarterly report in July -- even though that report marked the company's 23rd consecutive quarterly earnings record -- the market will be listening closely to what it says.

Regarding the usual headline numbers, analysts anticipate Polaris' revenue will climb 10% to $1.43 billion and translate to a 10.7% increase in net income to $2.28 per share. But Polaris is about more than just revenue and earnings. Investors would be wise to dig deeper into the mud to understand what actually drives these results.

Time to get dirty
Arguably most exciting right now is the relative strength of Polaris' motorcycle segment, which saw sales skyrocket 57% year over year last quarter to $162.1 million. Because Polaris was left with the enviable problem of production that wasn't able to keep up with demand, however, this growth came at a cost. Though Polaris made undeniable progress in its inventory management systems last quarter -- fulfilling a key opportunity for improvement highlighted in previous quarters -- it also willingly absorbed around $9 million in additional manufacturing costs and inefficencies, primarily related to scaling production and adding capacity to the paint system at one of its motorcycle facilities. Listen closely for additional updates, then, in this week's report on whether these inefficiencies have been fully resolved as Polaris continues increasing its motorcycle throughput.

To that end, on Monday Polaris announced its purchase of a facility and paint equipment previously occupied by Lehman Trikes in Spearfish, S.D. This facility will be dedicated to providing additional paint capacity for Polaris' Indian and Victory motorcycle lines and could potentially alleviate some of the bottleneck created by demand. 

Next, look for continued growth and market-share gains from Polaris' core off-road vehicle segment, which saw sales increase around 2% last quarter $688.8 million, or roughly 61.3% of total revenue. Polaris unveiled its model year 2016 power-sports lineup shortly after last quarter's report, which should reinvigorate demand and drive growth for the company's largest segment. If that turns out to be the case, and coupled with ongoing inventory management improvements, Polaris should be able to drive continued deceleration in dealer inventory growth as we reach the end of the year.

As winter approaches, this quarter is also important for Polaris' snowmobile segment. Dealers have been building inventory for the upcoming snowmobile selling season, which has only just begun and unofficially ends in March 2016. For reference, during last year's third quarter snowmobile sales rose 13% year over year to $162.7 million.

Next, we should watch for strength in the parts, garments, and accessories businesses, all of which enjoyed double-digit growth in the second quarter, leading to a collective 17% increase in revenue to $187.5 million. Finally, expect headwinds in the Global Adjacent Markets segment, which includes Polaris' government/military group and Work & Transportation vehicles. In Q2, Global Adjacent Markets revenue fell 3%, to $66.6 million, as the negative effects of foreign currency exchange more than offset an increase in unit shipments. To be fair, Polaris is hardly the only company to suffer the sting of currencies of late, though at this point those effects -- both positive and negative -- are minimal given the outsized influence of North America on its overall business.

Down the road
Finally, our market is a forward-looking machine, so keep in mind that consensus estimates also predict that Polaris will achieve full-year 2015 revenue of $4.99 billion, up 11.4% from 2014, and 11.3% growth in net income per share to $7.40. Both figures sit near the high end of Polaris' current guidance, which calls for revenue in the range of $4.92 to $5.025 billion (or 10% to 12% year-over-year growth), and earnings per share of $7.32 to $7.42 (also up 10% to 12%). To Polaris' credit, the latter range still exceeds the company's stated goal of sustaining 10% EPS growth over the long term.

In all, it seems likely Polaris will continue its long streak of setting a new company quarterly earnings record. But what remains to be seen is whether that will be enough to appease the market over the short-term given its already-high expectations. Depending on the gravity of the market's reaction if it doesn't, patient investors could be presented with a fantastic buying opportunity after the report hits the wires.