June 17, 2010 / 11:26 AM / 9 years ago

UPDATE 3-Winnebago profit tops view, shares surge

* Q3 net EPS 21 cents vs Street view 6 cents

* Signs consumers returning to the market

* But company remains ‘cautious’

* Shares up 11 percent (Adds details on selling prices, updates share rise)

By James B. Kelleher

CHICAGO, June 17 (Reuters) - Winnebago Industries Inc (WGO.N) posted higher-than-expected quarterly earnings on Thursday, boosted by resurgent consumer demand for its recreational vehicles.

The news sent its shares surging 11 percent in late-morning trading.

The company, the largest U.S. maker of motorhomes, said the average selling price of its products jumped 20 percent from a year earlier in the quarter, an encouraging sign in a highly cyclical industry that was pounded in recent years by tumbling demand and falling prices.

Winnebago said the average price of its vehicles was $92,000 in the quarter, up from about $76,500 a year before.

Just as encouraging, it said dealer inventories remained flat during the period despite a 120 percent jump in shipments.

In previous quarters, Winnebago had reported an uptick in shipments of its RVs. But it had acknowledged this reflected dealer restocking rather than a true rebound in consumer demand.

The latest results suggest the earlier dealer optimism was justified and that consumers are back — a sign of confidence in an economy still experiencing a fitful recovery.

“Retail sellthrough was good,” said analyst Kathryn Thompson of Thompson Research Group in Nashville.

Winnebago, which makes motorhomes under the Winnebago and Itasca brand names, said it was seeing continued strong dealer demand for its Class A line.

Demand for those bus-like vehicles, which can cost more than $300,000 and get less than 10 miles to the gallon, dropped dramatically in recent years as the U.S. real estate downturn morphed into a recession.

Even so, Winnebago said it would remain cautious “until we see prolonged improvement in retail sales.”

The company reported a profit of $6 million, or 21 cents a share, for the fiscal third quarter ended May 29, compared with a year-earlier loss of $8.6 million, or 29 cents a share.

The latest results included $2.4 million in one-time tax benefits.

Analysts on average expected Forest City, Iowa-based Winnebago to report a profit of 3 cents a share before one-time items, and net income of 6 cents a share, according to Thomson Reuters I/B/E/S.

“They did a nice job on the margins side, too — both on the gross margins and SG&A,” Thompson said.

Sales more than doubled, to $134.8 million from $50.8 million.

Winnebago shares were up $1.21 to $12.29 on the New York Stock Exchange after trading as high as $13.17 earlier in the session. (Reporting by James B. Kelleher, editing by Maureen Bavdek and Lisa Von Ahn and John Wallace)

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