LONDON, UK / ACCESSWIRE / July 27, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Polaris Industries Inc. (NYSE: PII), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=PII, following the Company's release of its second quarter fiscal 2017 earnings results on July 20, 2017. The snowmobile and ATV maker outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:

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Earnings Reviewed

Polaris reported quarter ended June 30, 2017, sales of $1.36 billion, up 21% compared to sales of $1.13 billion for Q2 2016. The Company's adjusted sales, which excluded the impact from Victory Motorcycles® net sales, were $1.36 billion in the reported quarter compared to $1.13 billion in the prior year's corresponding period. Polaris' sales exceeded analysts' expectations of $1.26 billion.

During Q2 2017, Polaris' gross profit rose 23% to $350.4 million versus $284.5 million in Q2 2016. As a percentage of sales reported gross profit margin was 25.7% versus 25.2% of sales for the prior year's comparable quarter. The Company's operating expenses increased 44% for Q2 2017 to $270.3 million from $188.0 million in Q2 2016.

Polaris reported net income of $62.0 million, or $0.97 per diluted share, in Q2 2017 compared with net income of $71.2 million, or $1.09 per diluted share, for Q2 2016. The Company's reported net income included costs related to the wind down of Victory Motorcycles, certain Transamerican Auto Parts ("TAP") integration and inventory step up costs and manufacturing network realignment costs. Polaris' adjusted net income for the reported quarter was $73.9 million, or $1.16 per diluted share, and came in ahead of Wall Street's estimates of $1.08 per share.

Segment Results

During Q2 2017, Polaris' Off-Road Vehicle ("ORV") and Snowmobile segment sales, totaled $845.5 million compared with $799.3 million for Q2 2016, reflecting a 6% gain on a y-o-y basis. The segment's gross profit increased 16% to $266.2 million, or 31.5% in the reported quarter, compared to $228.5 million, or 28.6% in the prior year's same quarter, rising primarily due to product mix.

Polaris' Snowmobilewhole good saless dropped 22% to $6.7 million in Q2 2017. The Company stated that Snowmobile sales in the second quarter are routinely low as it is off-season for snowmobile's retail sales and shipments.

For Q2 2017, Polaris' Motorcycle segment's sales were $198.0 million, representing a drop of 13% compared to $228.4 million reported in Q2 2016. Indian motorcycle wholegood sales increased significantly in Q2 2017, driven by new product introductions and increased awareness of the brand. The Motorcycle segment's gross profit in Q2 2017 was $21.1 million compared to $38.9 million in Q2 2016. Adjusted for the Victory wind down costs of $8.9 million, Motorcycle segment's gross profit was $30.0 million in the reported quarter, down from the prior year's comparable quarter.

For Q2 2017, Polaris' Global Adjacent Markets segment's sales grew 7% to $97.0 million compared to $91.0 million in Q2 2016. The segment's reported gross profit dropped 11% to $21.2 million, or 21.9% in the reported quarter, compared to $24.0 million, or 26.3%, in the prior year's same quarter. The Global Adjacent Markets division's adjusted gross profit, excluding the manufacturing realignment costs, rose 7% to $25.5 million, or 26.3%, for Q2 2017.

During Q2 2017, Polaris' aftermarket segment's sales, which includes TAP along with the Company's other aftermarket brands, increased significantly to $224.4 million compared to $12.1 million in Q2 2016. The segment's gross profit increased significantly to $59.9 million, or 26.7% of sales, in the reported quarter compared to $3.0 million, or 24.7% of sales, in the prior year's same quarter.

Financial Position and Cash Flow

For the six months ended June 30, 2017, Polaris recorded net cash provided by operating activities of $264.0 million compared to $348.3 million for H1 2016. The decline was attributed to lower net income and the timing of warranty and other accrued expense payments and higher factory inventory. The Company's total debt at June 30, 2017, including capital lease obligations and notes payable, was $1.07 billion. As of June 30, 2017, Polaris' debt-to-total capital ratio was 56% compared to 34% from the year ago same period, primarily due to the financing of TAP's acquisition. The Company's cash and cash equivalents totaled $127.4 million at June 30, 2017, down from $146.6 million for the same period in 2016.

During Q2 2017, Polaris repurchased and retired 502,000 shares of its common stock for $43.8 million. Year-to-date ending June 30, 2017, the Company had repurchased and retired 758,000 shares of its common stock for $65.6 million. As of June 30, 2017, the Company has authorization from its Board of Directors to repurchase up to an additional 6.7 million shares of Polaris' common stock.

Outlook

Polaris raised its sales guidance and narrowed its expected earnings per share range for FY17. The Company is forecasting adjusted net income to be in the range of $4.35 to $4.50 per diluted share compared with adjusted net income of $3.48 per diluted share for FY16. Full year 2017 adjusted sales are anticipated to increase in the range of 12% to 14% on a y-o-y basis.

Stock Performance

On Wednesday, July 26, 2017, the stock closed the trading session at $89.99, slipping 4.13% from its previous closing price of $93.87. A total volume of 1.24 million shares have exchanged hands, which was higher than the 3-month average volume of 732.96 thousand shares. Polaris Industries' stock price gained 6.67% in the past three months and 0.67% in the previous six months. Furthermore, since the start of the year, shares of the Company have rallied 9.22%. The stock is trading at a PE ratio of 37.56 and has a dividend yield of 2.58%. The stock currently has a market cap of $5.80 billion.

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