Utility vehicle demand drives revenue boost for Ski-Doo maker BRP

BRP Inc. notched record third-quarter revenues of $1.39 billion, up 14 per cent from last year and slightly above analyst estimates as demand for side-byside utility vehicles and Sea-Doos fuelled sales growth. Net income attributable to shareholders of the Quebec-based company, which makes Ski-Doo snowmobiles, recreational watercraft and off-road vehicles, was $90.3 million or 92 cents per share in the three months ended Oct. 31. That was up from $70 million or 67 cents per share in last year’s third quarter, when revenue was $1.23 billion. The revenue increase was largely due to higher wholesale of yearround products and a favourable foreign exchange rate variation of $31 million. BRP’s adjusted earnings were down slightly at $102.9 million or $1.04 per share, but well above the Thomson Reuters Eikon analyst estimate of 98 cents per share. Chief executive Jose Boisjoli said the company’s Can-Am offroad lineup saw year-over-year sales jump to the mid-20 per cent range in a sector that grew in the single digits. Strong demand for the side-by-sides — also known as utility task vehicles (UTVs) — helped drive revenues for all yearround products to $562 million, a 21 per cent increase in its biggest product category. Sea-Doos, meanwhile, rode a third-quarter sales wave 30 per cent larger than last year’s, Boisjoli said on a conference call with investors Friday. BRP shares jumped about six per cent in mid-morning trading on the Toronto Stock Exchange, climbing to $46.77 as the company maintained the upper end of its guidance — already raised twice in 2018. BRP expects normalized earnings per diluted share for the year to increase 30 to 35 per cent compared with the previous year, up from an earlier prediction for growth of 24 to 30 per cent. The acquisition this year of the AlumaCraft Boat Co. and Manitou Pontoon Boats helped boost BRP’s marine product revenues 30 per cent to $139 million. Aluminum fishing boats and pontoons — uncharted waters for BRP — comprise more than half of the U.S. boat market, Boisjoli has said, as the company casts its line for the world’s 700 million anglers. The CEO was bullish about sales of BRP’s signature Ski-Doos as well. “The good news is that there is snow in North America already,” he said. “As long as the unemployment rate is low and the housing market is OK, I would say we’re in good shape.” Boisjoli is also banking on the burgeoning market for threewheeled vehicles. BRP introduced the threewheeled Can-Am Ryker in September, which starts at US$8,500, nearly half as cheap as its cousin, the Can-Am Spyder. A new pricing option to lease the Ryker roadster for about US$150 per month also opens up lower-income markets, the CEO said. The company said it hopes more than 150 schools in the U.S. will offer its three-wheeled rider education program by the end of the year, with more than 9,000 drivers registered so far.