Winnebago (WGO) to Report Q4 Earnings: What's in Store?

Winnebago Industries, Inc. WGO is slated to release fourth-quarter fiscal 2020 results on Oct 21, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings is pegged at 90 cents per share on revenues of $699.43 million.

This recreational vehicle (RV) maker delivered better-than-expected results in the last reported quarter on higher-than-expected revenues from the motorhome segment.

Over the trailing four quarters, the company surpassed estimates on three occasions and missed in the other, the average surprise being 9.91%. This is depicted in the graph below:

Winnebago Industries, Inc. Price and EPS Surprise

Winnebago Industries, Inc. Price and EPS Surprise

Winnebago Industries, Inc. price-eps-surprise | Winnebago Industries, Inc. Quote

Investors project an earnings beat for Winnebago this time around. Reassuringly, our model also indicates the same.

Trend in Estimate Revision

The Zacks Consensus Estimate for Winnebago’s fiscal fourth-quarter earnings per share has been revised upward by 1 cent in the past 60 days. However, it compares unfavorably with the year-ago quarter’s earnings of $1.01 per share. Notably, the Zacks Consensus Estimate for quarterly revenues suggests a year-over-year jump of 31.9%.

Earnings Whispers

Our proven model predicts an earnings beat for Winnebago this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This has been elaborated below.

Earnings ESP: Winnebago has an Earnings ESP of +14.44%. This is because the Most Accurate Estimate is pegged 13 cents higher than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Winnebago currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

Winnebago’s continued focus on expanding its market share in the motorhome segment is likely to have boosted the company’s earnings in the quarter to be reported. The acquisition of Newmar Corporation has strengthened the Winnebago’s core RV platform and is likely to have bolstered profitability of its overall motorhome business in the fiscal fourth quarter. The Zacks Consensus Estimate for revenues from the motorhome segment in the August-end quarter is pinned at $295 million, significantly higher than the $204 million recorded in the previous quarter and the $201 million reported in the year-ago quarter.

With the economy gradually recovering and production units resuming work, the company’s towable segment is also likely to have gained momentum in the August-end quarter, especially its Grand Design RV business. This is expected to have boosted the company’s revenues generated from this segment. The Zacks Consensus Estimate for sales from towable business for the period in discussion is pegged at $362 million, up from the prior quarter’s $189 million and the year-ago quarter’s $307 million.

To conclude with, we remain optimistic that Winnebago is well positioned for an earnings beat this season on the anticipated sustainable outperformance of the towable segment, as well as the likely upside potential of its motorized business, considering Newmar Corporation's growth profile and the ongoing legacy of portfolio turnaround.

Other Stocks to Consider

Here are a few other stocks worth considering, as these too have the right combination of elements to come up with an earnings beat this time around:

Ford Motor Company F has an Earnings ESP of +19.51% and flaunts a Zacks Rank #1, at present. It is scheduled to report earnings results on Oct 28.
 
Gentex Corporation GNTX has an Earnings ESP of +1.94% and carries a Zacks Rank of 3 currently. The company is set to announce quarterly figures on Oct 23.

Cooper Tire Rubber Company CTB has an Earnings ESP of +19.84% and currently sports a Zacks Rank #1. The company is slated to release quarterly numbers on Oct 29.

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