BRP raised its full-year earnings outlook despite swinging to a second-quarter loss, as surging off-road vehicle shipments offset heavy pressure from U.S. metal tariffs and supplier disruptions.
The Canadian maker of Ski-Doos and Sea-Doos said Thursday that it now expects revenue of 9.23 billion Canadian dollars ($6.67 billion) to C$9.48 billion, up from last year's C$8.44 billion, and up from a previous expectation of C$9.13 billion to C$9.38 billion.
Normalized earnings, an adjusted figure, is now expected to be between C$4.00 and C$4.50 a share, up from its prior guidance of a range of between C$3.00 and C$3.50.
Net income is expected to fall to C$160 million to C$195 million from C$340.4 million a year ago.
BRP swung to a net loss of 136.8 million Canadian dollars ($98.8 million), or C$1.88 a share, compared with a gain of C$57.1 million, or C$0.79 a share, in the comparable quarter a year ago.
The net loss was primarily due to the impacts of Section 232 tariffs on steel, aluminum and copper imports into the U.S., as well as the effect of a C$74.8 million supplier financial restructuring hit, it said.
The tariffs also weighed on margins. The company reported gross profit margin that was almost halved in the year, falling to 11.7% from 21.1% a year ago.
Normalized loss per share, an adjusted figure which excludes one-off costs and exceptional items, came to C$0.18 a share. According to FactSet, analysts were expecting a loss of C$0.67 a share.
Revenues rose 18.5% to C$2.24 billion, topping analyst expectations of C$2.01 billion. The company benefited from heavier shipments of off-road vehicles and side-by-sides, which propped up North American retail sales, up 1%.
U.S. tariffs on Canadian imports are expected to be a significant weight on the Canadian company in the third quarter as well. BRP said it expects normalized earnings to be down about 50% to 60% compared with the prior-year period as duties on its products going into the U.S. weigh on performance.