After a year of slipping sales, Polaris Industries told investors Wednesday that it expects to regain some traction.
Shares of the Medina-based all-terrain-vehicle maker jumped nearly 11 percent after the company boosted its profit forecast for the year and declared that sales of ATVs and snowmobiles have finally bottomed out.
The company told investors that it expects sales to fall up to 25 percent to about $1.4 billion for 2009. However, Polaris predicted sales in its key North American market will soon rebound.
"It appears we have reached the bottom," the company said in its prepared presentation.
In addition, Polaris said profits would fall to $2.70 to $2.90 a share but that gross margins would rise up to 130 basis points because of cost cutting. The company laid off about 460 workers, or about 14 percent of its workforce, in the last year.
Polaris stock rose $4.11 to close Wednesday at $42.43. Compared with the same date last year, company shares have jumped 48 percent.
Like many manufacturers, Polaris has seen sales drop because of weak demand amid a severe recession. Sales of snowmobiles are expected to fall 15 to 20 percent this year while off-road vehicles will decline up to 25 percent.
But the company sees bright spots. Military sales will rise 50 to 100 percent this year because of strong demand from U.S. forces fighting in Iraq and Afghanistan. Last month, Polaris said it won a $6 million contract to supply ATVs to the U.S. Army in Afghanistan.
For the past five years, Polaris has had a team focused on supplying vehicles to the Department of Defense, federal government agencies and U.S. allies.
In this latest contract, the Army is buying MV700 all-terrain vehicles designed for military missions. Polaris said that the MV700 already has been used in military missions in urban, rural, mountain and desert regions around the world. The new Army contract covers ATVs, parts and accessories to be delivered later this year.
Thomas Lee • 612-673-7744
