arctic cat reduces sales estimates

Arctic Cat said yesterday that it is lowering its sales and earnings estimates for the 4th quarter and year, due to slower sales for snowmobiles, snow-related parts, accessories and clothing.

In addition, the Thief River Falls, Minn.-based maker of sleds and ATVs said increased sales incentives on snowmobiles and ATVs also had a negative impact on final quarter results. Complete results for the quarter, which ended March 31, are to be announced May 11.

However, the company estimates sales for the 4th quarter at $153 million compared to $157 million a year earlier and down from earlier estimates of $160 million to $170 million. Earnings for the quarter are estimated at a loss of 3 cents to 5 cents a diluted share. Last year earnings were 13 cents per share for the quarter and Cat had estimated earnings between 9 and 13 cents a share for this year's period.

Cat's chairman and CEO, Christopher Twomey, said in a release that the lower sales of snowmobiles was due to poor snowfalls in the Midwest and East, normally the two largest markets for sleds in the U.S. He also cited increased costs of incentive programs.

Sales for fiscal 2006 still are expected to hit a record $733 million, up from last year's $689.1 million, while earnings per diluted share are estimated at $1.17 to $1.19, compared to $1.36 a year earlier.

Twomey also said the company, which is launching the most new snowmobiles in its history for 2007, is to see higher sled sales in the next year. He based those comments on increased sled orders already received. Likewise he sees increased ATV sales, along with associated parts and accessories and predicted another record sales year for fiscal 2007, with increased earnings.