July 24, 2008 / 7:19 PM / 10 years ago

UPDATE 2-Spartan Motors Q2 results lag Street; shrs hit year-low

(Adds analysts’ comments, updates share movement)

By Bhaswati Mukhopadhyay

BANGALORE, July 24 (Reuters) - Automotive chassis maker Spartan Motors Inc (SPAR.O) posted lower-than-expected second-quarter results, hurt by a weaker motorhome chassis market, sending its shares down to a 52-week low.

Spartan’s chassis sales to the Class A diesel motorhome market fell 50 percent year-over-year in the quarter.

Shipments of Class A motorhomes have continued to weaken in 2008, falling 39 percent through May from a year ago, as the U.S. economic downturn and mounting gasoline prices have eroded consumer confidence and kept buyers out of showrooms.

The recreational vehicles market may remain weak next year, which may be a drag on Spartan’s results, analyst Walter Liptak of Barrington Research said by phone.

Spartan’s backlog for recreational vehicle chassis fell 47.3 percent to $12.5 million as of June 30.

“The outlook for motorhome chassis is challenging, though the Recreational Vehicle Industry Association is predicting the industry will reach its bottom for shipments in 2008 or early 2009,” CEO John Sztykiel said in a statement.

For the second quarter, Spartan’s net income was $10.4 million, or 32 cents a share, compared with $6.5 million, or 20 cents a share, in the year-ago quarter.

Analysts on average were expecting earnings of 36 cents a share, before special items, according to Reuters Estimates.

Revenue rose more than 28 percent to $196.5 million, but significantly missed analysts’ estimate of $243.6 million.

The pushout of some Mine Resistant Ambush Protected (MRAP) orders to the second half of the year hurt the company, analyst Walter Liptak of Barrington Research said.

Analyst Ned Borland of Next Generation Equity Research said the Pentagon’s demand for MRAPs has softened considerably as hostilities in the Middle-East have started to ease.

Oshkosh Truck (OSK.N) and Winnebago Industries Inc (WGO.N) are some of the Spartan’s key competitors.


Fire truck chassis sales fell 11.2 percent in the quarter.

Though there are some uncertainties in the fire business, it is expected to get better next year because of some pre-buying activity surrounding fire trucks, said Borland, who has a “buy” rating on the stock.

Barrington’s Liptak, who sees weakness in some of Spartan’s end markets, rates the stock “market perform.” Spartan’s key customers include BAE Systems (BAES.L), General Dynamics (GD.N) and Force Protection Inc (FRPT.O).

Separately, Crimson Fire, a Spartan unit that makes custom fire trucks and other rescue vehicles, said it was awarded an order worth more than $11.2 million to build 36 pumpers for Montgomery County, Maryland.

Shares of Spartan, based in Charlotte, Michigan, were down more than 4 percent at $6.60 in late afternoon trade. Earlier in the day, they touched a low of $6.17 on Nasdaq. (Editing by Bernard Orr, Himani Sarkar)

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