REV Group (REVG) Is Revving Up Today As Strong RV Pricing Drives Upside Quarterly Performance
2:31 pm Thursday, December 15th, 2022
REV Group (REVG), a manufacturer of emergency vehicles, buses, and RVs, is trucking higher after topping 4Q22 EPS and revenue estimates and issuing a solid outlook for FY23. The upside results come amid lingering supply chain issues, especially in the chassis market, and ongoing weakness in an RV industry that’s been beset by rising interest rates. Through a combination of price increases, effective inventory management and better-than-expected demand in the RV segment, and increased shipments of school buses, REVG overcame this challenging operating environment.
When fellow RV maker Thor Industries (THO) posted blowout Q1 results on December 7, an encouraging signal for REVG’s earnings report was revealed. THO, which owns the Airstream and Jayco brands, has ratcheted production lower this year to match the decelerating RV demand and to ensure that its dealers aren’t put into a difficult inventory position.
Increased shipments of school buses, terminal trucks, and street sweepers drove a 17% increase in revenue to $110.9 mln.
The main sore spot for REVG was the Fire & Emergency (F&E) segment, which saw revenue decline by nearly 9% to $277.3 mln.
Moving forward, a greater percentage of fire equipment will be built on this platform than ever before.
Additionally, REVG developed a product roadmap across the Fire group brands that will enable the standardization of subassemblies.
Overall, REVG’s Q4 results were better-than-feared, but, more importantly, FY23 is shaping up to be a stronger year as bookings strengthened and as the company exited Q4 with a record backlog of $4.2 bln.
