A cold, snowy winter may have plagued much of the U.S. this year, but a lack of snow in the Sierra Nevada region led to a tough quarter for ski resort operator Vail Resorts Inc.
The company reported fiscal second-quarter profit on Wednesday that came in well below market forecasts due to a dry winter in the Lake Tahoe region. It also lowered its profit forecasts given conditions there.
Vail Resorts, based in Broomfield, Colo., is the nation's top mountain resort operator. Its properties include the Heavenly, Northstar and Kirkwood resorts in the Lake Tahoe region, which straddles California and Nevada. The area suffered a slow start to the ski season because of dry conditions in December and January.
CEO Rob Katz said that total snowfall was down 73 percent for Tahoe as of the end of January. That led to a 27.7 percent drop in skier visits at its Tahoe resorts compared with the same period a year earlier. Meanwhile, skier visits increased 11.9 percent at the company's Colorado resorts where weather was more ski-friendly.
Vail Resorts said its net income fell to $59.3 million, or $1.60 per share, for the period that ended January 31. That's down from $60.6 million, or $1.65 per share, last year. Revenue grew to $452.7 million from $422.5 million.
Analysts polled by FactSet were anticipating earnings of $1.88 per share on revenue of $471.2 million.
Vail Resorts said that it anticipates net income of $23 million to $36 million for its 2014 fiscal year, versus its earlier forecast of $37 million to $55 million.
The company also said Wednesday that it is doubling its quarterly dividend to 41.5 cents per share from 20.75 cents per share. The new dividend is payable April 16 to shareholders of record as of April 1.
Shares of Vail Resorts fell $2.09, or 3 percent, to $69.20 in extended trading following the report.