Shares of Polaris Industries Inc. (NYSE: PII) down more than 5% Monday, after the manufacture off-road vehicles has slashed the 2016 earnings guidance, which is the result of an unexpected recall if it’s RZR Turbo vehicles and delays in development of the new 2017 models. Shares of the company fell in value by about 40% in 12 months.
The new guidance for 2016 is earnings per share of $3.30 to $3.80, a reduction of $2.50 a share to $2.70 a share from its previous outlook.
Polaris has announced of the recall of 13,000 of its vehicles, after reports that 19 the engines burst into flames because of overheating. There were six burn injuries associated with the fires, and in one unfortunate case a fire severely injured a child and caused the distraction of 15 acres of land.
Company officials explained in a statement that, Polaris “was unable to sufficiently validate the initially identified RZR Turbo recall repair, necessitating a more complex and expensive repair solution.”