Polaris Plunges as Engine Fires Lead to Slashed Forecastby
Polaris Industries Inc. shares fell the most in 11 weeks after the maker of off-road vehicles and Indian motorcycles slashed its full-year earnings forecast, citing delays in fixing recalled RZR trail vehicles after reports of fires.
Earnings in 2016 will be $3.30 to $3.80 a share, which is $2.50 to $2.70 a share lower than previous expected, the company said in a statement Monday. Sales, once predicted to rise as much as 2 percent, may now decline in the “mid to high-single digit percent range.” The shares closed down 5 percent, the most since June 24, at $76.79.
Polaris earlier this month recalled 13,000 vehicles including 2,230 that were previously announced, saying there have now been reports of 19 fires from overheated engines causing six burn injuries. In one case, a fire severely injured a child and destroyed 15 acres of land. The company said it has hired outside engineers to try to speed up a fix.
Polaris “was unable to sufficiently validate the initially identified RZR Turbo recall repair, necessitating a more complex and expensive repair solution,” the company said in its statement.