REV Group Swings To Profit In Q3, Beats Estimates; Revises FY21 Guidance

(RTTNews) - REV Group, Inc. (REVG), a manufacturer of specialty vehicles, on Wednesday, said it reversed the loss for its third quarter and reported a profit with a rise in sales, helped by its commercial and recreation divisions. On adjusted basis, the automaker beat the Street view. In addition, the Group revised its guidance for the current fiscal.

The Wisconsin-based firm recorded a profit of $23.7 million or $0.36 per share, compared to a loss of $3.6 million or $0.06 per share, reported for the July quarter, last fiscal.

Excluding items, the vehicle manufacturer posted its income at $24.5 million or $0.37 per share for the quarter, against $6.3 million or $0.10 per share in the last year. Six analysts, on average, polled by Thomson-Reuters were estimating the business to report earnings per share at $0.34. Analysts' estimates typically exclude one-time items.

Despite supply chain headwinds, the REV Group posted operating income of $28.5 million for the three-month period, versus $2.1 million reported during the same period last year.

The company's adjusted earnings before earnings before interest, taxes, depreciation, and amortization or EBITDA was reported at $41.6 million, higher than $21.4 million in the year-ago period.

Following a higher demand for specialty vehicles, the third-quarter net sales of REV Group rose by 1.9 percent to $593.3 million. Analysts had expected the company to post revenues of $663.4 million for the quarter.

Segment wise, the Group generated revenues of $111.3 million and $212.5 million from commercial and recreational segments, respectively, compared to $92.4 million and $182.7 million reported for the same thirteen-week period in 2020.

The company will pay a quarterly cash dividend of $0.05, per share on October 15, to shareholders of record on September 30.

Amidst some supply chain and labor challenges, the REV Group revised its guidance for the current fiscal. The firm now expects its net income and adjusted net income in the range of $54 million - $64 million, and $74 million - $83 million, respectively. This compares to its previous projection range of $52 million - $68 million and $73 million - $88 million, respectively.  

Now, the firm expects its net sales to be in the range of $2.30 billion - $2.45 billion, against its previous guidance range of $2.45 billion - $2.60 billion. Analysts now expect sales at $2.54 billion for the fiscal year 2021.

The company also projects its adjusted EBITDA for the full year in the range of $140 million - $150 million, against its previous guidance range of $145 million - $160 million.