Fleetwood Enterprises shares drop on weak RV sales

Fleetwood shares dropped 54 cents, or 18.2 percent, to $2.43 in afternoon trading, after hitting a 5-year low of $2.41 earlier in the session. The stock has lost more than 75 percent from its 52-week high of $11.41 in July.

The Riverside, Calif.-based company reported early Thursday that cost controls and asset sales helped it swing to a quarterly profit, despite soaring fuel prices and turmoil in the mortgage industry.

Fleetwood expects the outlook for the RV industry to remain difficult into the spring of 2009.

Also Thursday, AvondalePartners analyst Kathryn Thompson said industry data indicated that total wholesale RV shipments dropped 25.6 percent in May--the steepest year-over-year decline in shipments since February 1991.

Thompson said she believes the current downturn could surpass a 28-month downturn in the early 1990s.

"Given the continued weakness in shipments, we believe that there is still room for downward movement in the RV Group, and fully anticipate the group to trade closer to 10-year trough valuations," Thompson said.