Fuel Prices Put Winnebago's Earnings In Reverse

June 20, 2008 4:06 p.m. EST

Des Moines, IA (AHN) - Winnebago Industries (WGO) reported a 73 percent drop in their third quarter profit as high fuel prices and tightening credit led to a large decline in sales.

The company reported Friday third quarter net income of $3 million or 10 cents a share on revenue of $139.7 million. In the same quarter a year earlier, income was 35 cents a share on $231.7 million in revenue.

"The motor home market has changed significantly in the past year, with dramatic declines in the past few months," CEO Bob Olson said in a statement, according to the associated press. "Discretionary purchases have declined in the United States as the country is faced with unstable fuel prices, consumer confidence at 16-year lows and a tighter credit environment."

The company said they will close its Charles City, Iowa factory and cut 270 jobs.

Winnebago said their dealer inventory levels dropped by 10 percent during the third quarter and that dealers will likely continue to cut inventory.

Sales in March and April, usually strong months for the company, were down 30 percent in 2008.

Shares of Winnebago are trading at $11, a fresh 52 week low.