MONTREAL - BRP Inc., the former recreational products division of Bombardier Inc., says it remains on track to meet the company's full-year guidance despite a bigger loss in its seasonally slow second-quarter and revenue that missed analyst forecasts.
The Quebec-based maker of Ski-Doo snowmobiles, Sea-Doo personal watercraft and Can-Am wheeled vehicles said its net loss surged to $7.9 million for the period ended July 31, compared with a loss of $2.9 million a year earlier.
The change was largely due to the impact of a larger foreign exchange loss related to BRP's long-term debt.
Adjusting for one-time items, its adjusted profit was $7.6 million, or seven cents per share, down from $18.2 million or 18 cents per share in the second quarter of 2012. That was still ahead of analyst estimates of four cents per share.
The company recorded a gain of $11 million in the quarter from an insurance recovery, compared with $9.7 million in restructuring costs last year from transferring manufacturing to Mexico, and taking a $7.6-million charge from closing its sport boat business.
Revenues in the quarter increased two per cent to $620.9 million, including the positive impact of a stronger euro. Revenues were up 6.5 per cent per cent or $37.8 million when excluding the impact of BRP's decision to exit of the sport boat business last fall.
BRP's revenues benefited from a 16 per cent growth in North American sales and an improved reach overseas.
"Our second quarter results were right in line with our expectations and we are on track to achieve our guidance for the year," said president and CEO Jose Boisjoli.
"I am pleased with the performance of our team and the strength of our brands. Our 14 per cent growth in international markets (excluding sport boat) is a strong testament to our product momentum."
The company (TSX:DOO) plans to unveil its new Sea-Doo and Can-Am models for the 2014 season next week at its semi-annual dealer meeting in Florida.
Revenues from seasonal products decreased by $15.5 million, or 9.9 per cent. Excluding its exit from the sport boat business, revenues would have increased by $9.5 million or 7.2 per cent due to higher sales volumes offset by unfavourable weather conditions.
Year-round products revenue grew 8.1 per cent to $278.1 million, mainly due to higher worldwide sales of both ATV and side-by-side vehicles. Propulsion systems revenues decreased 2.9 per cent to $85.9 million due to lower volume of outboard engines sold. Parts, accessories and clothing revenues increased 9.4 per cent to $116.3 million.
Benoit Poirier of Desjardins Capital Markets said the BRP's shares are a buying opportunity considering the company maintained its full-year guidance and BRP's promising sales opportunities.
"We see significant growth potential in side-by-side vehicles with the newly launched four-seater Maverick and the increasing visibility of the Spyder, particularly in Asia," he wrote in a report.
"In our view, BRP is a compelling growth play in the powersports market. Its dominant position in the segment has been built on a history of innovation and operational efficiency."
On the Toronto Stock Exchange, BRP's shares closed down 18 cents at $27.15 on Thursday.
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