REV Group Reports Mixed Earnings, Shares Drop 12% After Guidance
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REV Group Faces Challenges Despite Earnings Beat
BROOKFIELD, Wis. - REV Group, Inc. (NYSE: REVG) recently announced third-quarter earnings that, while beating estimates, have led to a significant downturn in their stock price. The company's shares plummeted by 12% during early trading sessions as news of weaker-than-expected revenue and guidance emerged.
Financial Highlights of the Quarter
The specialty vehicle manufacturer reported adjusted earnings per share of $0.48, which exceeded analyst expectations of $0.42. However, the revenue figures painted a different picture, coming in at $579.4 million, which fell short of the consensus target of $618.7 million, marking a substantial decline of 14.8% year-over-year.
Revised Revenue Outlook for 2024
In a notable shift, REV Group has adjusted its full-year revenue outlook for 2024 to a range of $2.35 billion to $2.45 billion, which is below analysts' expectations of approximately $2.44 billion. This revision highlights persistent obstacles within their Recreational Vehicles segment, a critical area for the company.
CEO Insights on Market Conditions
CEO Mark Skonieczny addressed these challenges, stating, "Market conditions remain challenged" within the RV sector. However, he also expressed confidence in the company's strategies, emphasizing their proactive approach to managing costs in alignment with market demand.
Positive Signs in Specialty Vehicles
Despite the overall challenges, the Specialty Vehicles segment of REV Group showed promising results, boasting double-digit adjusted EBITDA margins. Skonieczny pointed to sequential and year-over-year improvements in their fire and ambulance businesses, which signals potential growth in those areas.
Financial Growth Metrics
The company also reported a net income increase to $18 million, compared to $14.9 million from the previous year. Adjusted EBITDA rose to $45.2 million, up from $39.4 million when excluding the impact from a recently divested business.
Frequently Asked Questions
What caused REV Group's shares to fall?
The shares dropped primarily due to a revenue miss and lower-than-expected guidance for 2024, despite beating earnings estimates.
How did REV Group perform in the latest quarter?
The company reported an adjusted earnings per share of $0.48 but missed revenue expectations with $579.4 million in sales.
What is the new revenue outlook for REV Group?
REV Group has adjusted its full-year revenue outlook to between $2.35 billion and $2.45 billion for 2024.
Which segments showed positive growth for REV Group?
The Specialty Vehicles segment showed positive growth, particularly in fire and ambulance businesses, achieving double-digit adjusted EBITDA margins.
What challenges did the CEO mention regarding the RV segment?
The CEO cited ongoing challenges in market conditions within the Recreational Vehicles sector as a significant hurdle for the company.
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