updated 10/13/2005 4:28:40 PM ET 2005-10-13T20:28:40

Winnebago Industries Inc. on Thursday said earnings for the fourth quarter fell almost 20 percent as sales of its recreational motor homes fell amid an industrywide downturn that has been induced mostly by higher gasoline prices.

Net income slipped to $15.4 million, or 46 cents per share, for the three months ended Aug. 27 from $19 million, or 55 cents per share, a year earlier. Despite the decline, the result was 4 cents better than the mean estimate of 42 cents from a survey of analysts by Thomson Financial.

Revenue fell to $231.5 million from $283 million, and was slightly below analysts' forecast of $233 million. Deliveries of motor homes dropped to 2,551 units from 3,088 a year earlier.

The company said the earnings decline reflects lower sales and a shift in product mix from its top-line Class A luxury models to lower-priced motor homes, offset in part by lower costs for incentives.

In a conference call with analysts, Chairman and Chief Executive Bruce Hertzke said sales of the Winnebago View and Navion, two new smaller Class C models, had been strong.

Analyst Wes Cummins, who follows rival National RV for Los Angeles-based B. Riley & Co., said faster sales of cheaper models appears to be the industry trend.

"The one data point that we saw was that they were seeing more strength in the low-end, compared to their middle- or high-end," Cummins said. "Potentially, you're seeing people move down on the price line as gas prices move up."

He said National RV was reintroducing its low-end line "directly for this purpose."

Industrywide, shipments of motor homes to dealers were down 13.1 percent for the year ended August 2005, said Phil Ingrassia, of the Fairfax, Va.-based RV Dealers Association. However, total RV shipments, which include non-motorized towables, were down just 0.6 percent.

Hertzke said weak demand for the motor home, a recreational vehicle, was "driven by lower consumer confidence, primarily because of the volatility of the economy and higher cost of fuel.

"We anticipate these factors, along with continued shift in product mix, to continue into fiscal 2006," he said.

Winnebago has adjusted production through shortened work weeks and work force reductions, he said. The company laid off 4.5 percent of employees at its four Iowa plants in August.

Winnebago's sales order backlog stood at 2,059 units as of Aug. 27, 19 percent lower than a year ago.

For the fiscal year, Winnebago posted a profit of $65.1 million, or $1.92 per share, down from $70.6 million, or $2.03 per share in fiscal 2004. Revenue fell to $992 million from $1.1 billion.

"Motor homes are luxury items, so we expect to continue to see typical swings in demand for our product," said Ed Barker, president and chief financial officer.

Ingrassia said motor home sales likely will pick up industrywide as gas prices and consumer confidence improve.

"Winnebago would be poised to roar back nicely when things stabilize," he said.

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