REV Group Inc. (REVG, Financials) reported fiscal fourth-quarter 2024 income of $597.9 million, down 13.8% from $693.3 million; however, the figure beat earnings estimates, leading to a rise of 15% in the stock price. The Collins Bus divestiture partially explained the decline; the disposal reduced revenue by 6.4%, partly offset by specialty car sales but driven by recreational vehicle sales declines.

Compared to $29.7 million, or $0.50 per diluted share, a year ago, net income for the quarter climbed to $41.7 million, or $0.80 per diluted share. Versus the previous year, adjusted net income was $26.9 million, or $0.51 per share, compared with $31.7 million, or $0.53 per share. Revenue dropped 9.8% to $2.38 billion for the whole fiscal year while net income jumped to $257.6 million, or $4.72 per diluted share, from $45.3 million, or $0.77 per diluted share in fiscal 2023. Strategic divestments and better operational effectiveness helped to support the growth.

The business released fiscal 2025 projections with sales ranging from $2.3 billion to $2.4 billion. With free cash flow predicted between $90 million and $110 million, adjusted EBITDA is projected to run between $190 million to $220 million. Noting notable margin increases in the specialized vehicles area, President and CEO Mark Skonieczny complimented the company's varied portfolio and cost discipline for the better performance.

Under which $126.1 million of shares were repurchased, the board of directors approved a new $250 million share repurchase program replacing the former $175 million program. The new authorization gives buyback share flexibility using a variety of approaches. The board also authorized a 20% increase in the quarterly dividend, therefore bringing it to $0.06 per share, payable Jan. 10, 2025, to record owners of Dec. 26, 2024.

In the fourth quarter, revenue in the sector for specialist cars came to $439.9 million, an 8.1% year-over-year drop. Reflecting price moves and higher fire equipment shipments, adjusted EBITDA in the sector climbed 15.9% to $50.2 million. Affected by less shipments and more discounting, recreational vehicle revenue dropped 26.5% to $158.1 million. Reduced volumes and inflationary pressures caused adjusted EBITDA in the division to decline 57.6% to $8.1 million.

REV Group reported $24.6 million in cash and equivalents as of Oct. 31; $349.6 million under its revolving credit facility. Good working capital management helped to sustain $102.2 million, the full year free cash flow. The company's backlog dropped somewhat to $4.47 billion, but orders for fire equipment and ambulances helped to overcome reductions in other areas.

This article first appeared on GuruFocus.