REVG - Rev Group shares are down 22% on Wednesday: this is why

Shares of Rev Group Inc ( NYSE: REVG ) are down 22% this morning on weaker-than-expected results for its fiscal fourth quarter.

Q4 results

Rev Group reported $17.9 million in adjusted net income that translates to 27 cents per share. The Wisconsin-based company generated $589.9 million in revenue. In comparison, analysts had forecast 29 cents of adjusted EPS on $600.72 million in sales.

In the same quarter last year, Rev Group had posted $616.3 million in revenue and 19 cents of per-share earnings on an adjusted basis.

The NYSE-listed company valued backlog at $3.1 billion at the end of Q4, thanks to strong demand across all segments. Earlier this week, Rev Group signed additional agreements for electric ambulances.

Full-year performance

Rev Group reported $2.38 billion in sales for the full year on $76.9 million in adjusted net income. Cash from operating activities climbed to a record $158.3 million this year, and net debt came down by $129.1 million. In the earnings press release , CEO Rod Rushing said:

Significant progress we have made building our operational capabilities have positioned us well to continue to improve our performance and create shareholder value while navigating through supply chain challenges, difficult labour markets and inflationary headwinds.

Future outlook

For fiscal 2022, Rev Group now forecasts up to $73 million in net income on $2.3 billion to $2.55 billion in net sales.

According to the manufacturer of ambulances and other speciality vehicles, it had $13.3 million in cash and equivalents at the end of the fourth quarter. Rev Group spent $10.8 million in Q4 – an increase from $3.8 million last year. It repurchased $3.9 million worth of its common shares in the recent quarter.

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