Spartan Motors stalls on news of Q3 profit decline
Shares of Spartan Motors Inc. (Nasdaq: SPAR) have sputtered and shifted into reverse on news before the start of trading that third-quarter profit declined and missed Wall Street’s projections.
The maker of custom vehicle chassis and emergency-rescue vehicles reported that net income for the third quarter ended Sept. 30 was $2.6 million, or $0.08 per share, short of the $0.23 per share expected by analysts. A year earlier the Charlotte, Mich.-based company had earnings of $4.1 million, or $0.13 per share.
However, net sales raced ahead 36.8% to $148.9 million, from $108.9 million in the third quarter of 2006.
“As we look forward, the third quarter should be an anomaly in our 2007 results,” said president and CEO John Sztykiel in a statement. “We are anticipating the fourth quarter will be more in line with our results in the first two quarters of the year.”
Spartan Motors reported that gross margin declined to 11.8% from 15.8% a year ago, reflecting an increase in capacity and production inefficiencies.
“Based upon the urgent need and future opportunity, the decision was made to accelerate the process of increasing production capacity for our military and specialty vehicle business,” CEO Sztykiel said.
The increase, which raised production capacity 300% from the level six months ago, negatively affected earnings and caused a 32% jump in backlog compared with the second quarter.
At 3:41 p.m. ET, Spartan Motors (SPAR) shares had let go $2.93 or 17%, to $14.19. The 52-week low is $7.79, set on Oct. 26, 2006. The 52-week high is $25.04, reached on June 4.
