UPDATE 2-Arctic Cat Q4, 2009 outlook beat Street; shares rise

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May 15 (Reuters) - All-terrain vehicle and snowmobile maker Arctic Cat Inc (ACAT.O) posted a surprise fourth-quarter profit and forecast 2009 earnings above analysts' estimates, sending its shares up as much as 14 percent in early morning trade.

The company, which also makes related parts, garments and accessories, reported net income of $424,000, or 2 cents a share, compared with a net loss of $1.6 million, or 8 cents a share, a year earlier.

Net sales for the quarter ended March 31 were $168.9 million, down about 2 percent from $172.6 million a year ago.

The company said fourth-quarter earnings were hurt by a weak retail environment for all-terrain vehicles (ATV), the reduction of a planned, large multi-store retail customer order, and an ATV parts supply issue.

Analysts on average expected a loss, excluding special items, of 4 cents a share and revenue of $168.2 million, according to Reuters Estimates.

In April, Arctic Cat said it may post a loss for the fourth quarter after a reduced order from a major retailer. An analyst with RBC Capital Markets had told Reuters that the retailer could be Gander Mountain (GMTN.O), which posted a 62 percent drop in fourth-quarter earnings.

The company said it expects a first-quarter loss of 50 cents to 60 a share and net sales of $85 million to $95 million, hurt by a lower tax benefit.

Analysts on average expect a first-quarter loss of 46 cents a share and revenue of $83.8 million.

"Although recreational vehicles continue to experience a tough retail market, we believe our current dealer inventory levels will enable growth in sales to dealers in our fiscal 2009," said Chief Executive Christopher Twomey.

The company expects 2009 earnings of 18 cents to 28 cents a share, above analysts' estimates of 12 cents a share, driven by higher snowmobile revenue, greater product mix, and lowered costs.

The company expects 2009 revenue of $650 million to $674 million, above analysts' estimates of $626.1 million.

Shares of the Thief River Falls, Minnesota-based company rose 14 percent to a high of $8.48, before paring some gains to trade up 81 cents at $8.24 in morning trade on Nasdaq. (Reporting by Anne Pallivathuckal in Bangalore; Editing by Jarshad Kakkrakandy)