Top RV Maker Fleetwood Reports Profit

After posting losses for more than two years, Fleetwood Enterprises Inc. on Monday reported a profit of $4.6 million, or 13 cents a share, during its fiscal second quarter as the company’s new line of motor homes and travel trailers rode a boom in recreational vehicle sales and rentals.

However, the Riverside-based company said that its manufactured-housing business continued to shrink dramatically, with no recovery anticipated until the end of next year, as buyer financing remained scarce.

Profit for the three-month period ended Oct. 27 compared with a net loss of $12.3 million, or 38 cents a share, in the year-ago quarter, the company said. Quarterly sales increased 8.5%, to $641.1 million.

The company’s results beat analysts’ expectations, but Fleetwood’s shares were caught in a selling wave on Wall Street on Monday, with the company’s stock falling 25 cents to $7.95 on the New York Stock Exchange.

“This quarter’s results demonstrate the great strides Fleetwood has taken over the past two years,” said Fleetwood President and Chief Executive Edward B. Caudill, a former truck manufacturing executive who took control of the company last summer. “Management expects that we will see further improvements to profitability, particularly in the RV Group, following the seasonally difficult third quarter.”

The nation’s largest RV manufacturer -- whose brands include Pace Arrow, Southwind and Coleman -- said that its RV group’s second-quarter operating results swung to a $17-million profit from a loss in the year-ago quarter.

Sales shot up 33% on a year-over-year basis, to $395.8 million, as the company’s new-product development push began to pay off, industry analysts said.

“Fleetwood has been [increasing] market share in the last two quarters” over such rivals as Winnebago Industries Inc. and Monaco Coach Corp., said analyst William Gibson at Banc of America Securities, which was the lead investment bank on $187 million in convertible securities Fleetwood issued last year.

While RV sales boomed, the company’s manufactured-home division -- the second-largest in the nation -- reported an 18% decline in quarterly revenue, to $234.4 million. Operating profit sank 74% from the same period last year, to $4.4 million.

Mobile-home sales have suffered industrywide partly because of the lack of financing available after the closure this year of GreenPoint Financial, one of the nation’s largest mobile-home lenders.