polaris profits slip 34

Polaris Industries Inc. today reported earnings in the first quarter fell 34% due to a large drop in snowmobile sales and reduced shipments of ATVs.

For the record, first quarter 2006 income was $11.6 million, down from $17.6 million a year earlier. Sales were off 7%, falling from $358.3 million to $333.5 million in the quarter, which ended March 31st.

Tom Tiller, Polaris' CEO, said the results met the company's expectations and he forecast the Medina, Minn. based firm will see sales fall 1% to 3% overall for the year, compared to 2005.

He called the current market challenging while reporting snowmobile sales of $2.5 million in the quarter, a 65% decrease from the previous year figure of $7.2 million. In a statement, the company said sled shipments were lower due to weaker retails sales caused by below normal snowfalls across North America and warranty issues on certain new products that resulted in higher season-ending dealer inventories.

Meanwhile, ATV sales were down 8% in the quarter, and Tiller said factory inventories are being reduced as Polaris dealers also rebalance their inventories to match sales expectations.

Polaris did see growth in Ranger and Hawkeye ATV sales, among others. Plus Victory motorcycle sales were up 8% and are expected to grow 15% to 20% for the year. The firm also saw a 9% growth in income from its financial services segment and is seeing growth in its international business.