A recent slowdown in the nation's housing construction sector has cooled the outlook for a Grand Rapids-based company that manufactures rubber-tracked vehicles, undercarriages and accessories. ASV Inc. notified analysts Tuesday that it probably will fall 20 percent to 24 percent shy of earnings guidance it offered earlier in the year.
The company had projected it would post earnings of $1.05 to $1.15 per share in 2006. Now, ASV predicts it will earn 80 to 84 cents per share. Last year, the company earned $1.01 per diluted share.
Dick Benson, ASV's chairman and chief executive officer, said the company adopted a more conservative view in light of economic uncertainties. Nevertheless, he believes the company may still be able to nearly equal its performance in 2005.
"This follows three years of average annual growth in excess of 75 percent," Benson said in a statement. "We view this temporary slowing as a perfect opportunity to accelerate progress on the strategic priorities that are key in positioning us for continued longer-term growth."
Nevertheless, Wall Street hasn't smiled on ASV's missed projections. The company's stock, which trades on the Nasdaq has tumbled from a high of about $35 per share earlier this year to $14.61 per share at the end of trading Tuesday.
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Still, ASV did deliver a bit of encouraging news Tuesday. The company reported that sales of machines marketed under its own name are up 29 percent for the first nine months of 2006, as compared with the same period last year. The company sold $105.6 million of its own equipment through the first three quarters of 2006.
However, its sales of undercarriages to Caterpillar and Vermeer were off 31 percent for the third quarter and 6 percent for the year-to-date through September. These undercarriage sales, at $50.9 million through the third quarter of this year, constitute about 22 percent of ASV's business.
Loegering Manufacturing Inc., an ASV subsidiary, had a weak third quarter but is showing growth for the first nine months of the year, selling $19.8 million of equipment -- 6 percent more than it did during the same period last year. Loegering generates about 7 percent of ASV's total sales.
Sales of ASV service parts also are down for the year. The company has sold $23.7 million in parts through the first three quarters of 1996 -- 4 percent less than it did during the same period last year. The company said its part sales are slipping because of the improved durability of its equipment.
ASV employs about 270 people, including about 225 workers in Grand Rapids and Cohasset.
