Winnebago profit skids 73% in Q3

Winnebago Industries wgo said Friday its third-quarter profit skidded 73% as high gas prices, tighter credit and a soft economy drive motor homes sales lower industrywide.

The company is one of the nation's leading manufacturers of motor homes, which are sold under the Winnebago, Itasca and ERA brand names.

Winnebago earned $3 million, or 10 cents a share, in the three months ended May 31 compared with a profit of $11.3 million, or 35 cents a share, a year ago.

Sales fell almost 40% to $139.7 million from a year ago.

The latest net income figure included a tax benefit of $8.9 million.

The company reported an operating loss of $6.9 million compared with an operating income of $14.7 million a year ago.

Analysts surveyed by Thomson Financial expected earnings of 3 cents a share on sales of $157.6 million. The estimates typically exclude one-time items.

"The motor home market has changed significantly in the past year, with dramatic declines in the past few months," CEO Bob Olson said. "Discretionary purchases have declined in the United States as the country is faced with unstable fuel prices, consumer confidence at 16-year lows and a tighter credit environment."

Olson said the industry has seen a decrease in motor home sales of more than 26% for the first four months of this year and a decline of more than 30% in both March and April, typically strong sales months.

He said an industry trade group predicts sales volumes to fall to levels not seen since 1991.

Winnebago announced earlier this month plans to close its Charles City factory, eliminating 270 salaried and hourly employees. Olson said the plant closure will occur by Aug. 1.

He said additional consolidation is underway to reduce overhead costs. The restructuring will cost the company $2.5 million to $5.5 million in charges in the fourth quarter.