Extra manufacturing capacity boosts BRP share price

Shares of BRP Inc. shot up 6 per cent on Thursday after the recreational vehicle manufacturer reported blowout first-quarter earnings and raised guidance for the remainder of the year.

The maker of Sea-Doo, Ski-Doo and Can-Am all-terrain vehicles recorded adjusted earnings of $0.52 per share, nearly double the $0.28 estimate from analysts surveyed by Bloomberg, with strong demand across most segments.

“We are globally outpacing the industry in most of our market. And all our projects, whether it is new product or increasing production capacity, are on plan,” said president and CEO José Boisjoli in a morning conference call.

Boisjoli highlighted the success of BRP’s two-seater segment, which was introduced more than two years ago and has been a strong contributor to earnings growth.

“Our side-by-side business is firing on all cylinders,” he said. “There is strong demand for our lineup, and we are ramping up our production capacity to meet increased demand.”

As part of that ramp-up, Boisjoli announced the completion, as of May 1, of a 30-per-cent capacity increase at its Juarez 2 facility in Mexico, enabling the company to raise high-end guidance for EPS growth from 25 per cent to 30 per cent.