* Q4 net profit falls 29 pct
* Motor home shipments decline 6.5 pct
* Backlog, inventory also down
* Company considering price reductions in 2012 - CEO By A. Ananthalakshmi and Lynn Adler Oct 13 (Reuters) - Winnebago Industries Inc's profit topped Wall Street estimates, but hopes of a nascent recovery in the recreational vehicle industry earlier this year skidded as the largest U.S. motor home maker warned of ebbing consumer confidence.
Shares of the company, known for its large, luxurious touring buses that provide home-like comfort on the road, rose as much as 11 percent to $8.50 in early trading, but pared most of those gains to trade up 1 percent.
"While we experienced improved market conditions in the first half of fiscal 2011, we were disappointed to see the negative effects caused by falling consumer confidence throughout the remainder of the year," CEO Randy Potts said in a statement.
Sales of Winnebago's motor homes, which can sell for as much as $300,000, are heavily dependent on discretionary spending by consumers. A fragile economy and slow jobs growth have dampened consumer confidence in recent months.
Forest City, Iowa-based Winnebago, which sells its motor homes under the Winnebago, Itasca and ERA brands, said motor home deliveries during the quarter fell 6.5 percent to 1,088 units. Dealer inventory slipped 4.2 percent.
Backlog at quarter-end fell 10 percent to $74.7 million, suggesting demand was weak for the company's motor homes, some of which include beds, kitchens, toilets and showers.
In September, U.S. consumer confidence dropped to near 2-1/2-year lows, pointing to weak spending in the months ahead.
Speaking to Reuters, CEO Potts said the industry had a sense of optimism in the most recent spring.
"Things were starting to look better. Everybody in the RV industry, all the way down to the dealer level, was hoping this was going to be beginning of a bigger change, and it just didn't develop," Potts said.
"Now it's time to get through the fall season, which is always a tougher time of year from a wholesale perspective."
For years, the company has been hit by the global recession and tight credit markets. Its shares have lost almost 64 percent since the financial crisis hit consumer spending on big-ticket purchases.
Winnebago's most recent fourth-quarter net income fell to $3.5 million, or 12 cents a share, from $4.9 million, or 17 cents a share, a year ago.
Revenue rose 6 percent to $130.5 million due to price increases.
Analysts were expecting a profit of 4 cents a share on revenue of $116.8 million, according to Thomson Reuters I/B/E/S.
But Potts said the company was considering price reductions on certain models for 2012.
"Our expectation as a result of that would be increased volume," he said.
Potts said the company was working toward diversification, looking for opportunities to grow the business. He declined to specify further. A spokeswoman later clarified that the company was also open to opportunities outside of the motor home industry.
Last month, Winnebago's rival Thor Industries Inc posted a better-than-expected quarterly profit but said sales of motor homes fell 10 percent.
Winnebago also competes with Navistar International's Monaco brand of RVs.
RV shipments in 2011 are expected to total 247,500 units, up 2.1 percent, according to a forecast by industry analyst and director of consumer surveys at the University of Michigan, Richard Curtin.
Curtin said RV sales are expected to face continued challenges because of slow growth in jobs, incomes and credit market, and continued weakness in the housing market.
Shipments are expected to fall 2 percent in 2012 to 242,400 units, according to Curtin.