Winnebego Earnings Send WGO Stock Soaring, Signal Consumer Spending Rebound

Winnebago Industries Inc. (WGO) reported earnings Thursday morning that have continued the motor home giant’s successful 2010. Revenues were up more than 165% over 2009, showing that consumer spending on big ticket items may be on the rebound.

Specifically, WGO reported earnings of $3.4 million, their first operating profit in over two years and an astounding increase over a reported operating loss of -$14.8 million just one year ago.

The world�s leading motor home manufacturer reported quarterly revenue of $134.8 million, trouncing low estimates of $104 million and bringing Winnebago�s total sales for fiscal 2010 up to $326.4 million so far. At this point in fiscal 2009, Winnebago was sitting on a loss of $28.5 million, or 98 cents per share. Now, at the end of the first nine months of fiscal year 2010, earnings total $5.4 million, or 18 cents a share.

This is all thanks to the healthy motor home market and a resurgence in consumer spending on big-ticket items. Shipments of Class A, B, and C motor homes have increased 23.2% over the previous quarter, and up a whopping 120.3% over Q3 2009. Winnebago will be shipping their 2011 line or products to dealers this month, an exciting prospect for dealers and WGO stockholders alike.

Winnebago is handily outperforming its competitors this year. Thor Industries )THO) has enjoyed some success in the last year or so thanks to an uptick in the motor home market, with shares almost doubling from last summer to April of this year. However, shares have given back about -30% in the last six weeks or so. WGO stock suffered a similar stumble but has bounced back nicely with a double-digit jump in share price over the last two days alone

Looking forward, Winnebago could continue to firm up. The company’s fortunes have improved dramatically over a year ago. WGO has already tacked on a +70% gain in share price compared to a year ago, over three times better than the +22% gain in the Dow Jones Industrial Average over the last 12 months. Times are good, and projections for the quarter ending in August 2010 are indicators that it’s still a good time to buy.

While Winnebago has said they plan to remain cautious, Recreation Vehicle Industry Association economist Dr. Richard Curtin is predicting retailer shipments of 22,600 motor homes in the 2010 calendar year. Provided the market stays healthy, WGO stock should only increase in value.

As of this writing, Anthony Agnello did not own a position in any of the stocks named here.

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