Rev Group Inc (NYSE: REVG) stock fell over 9.7% on September 6th, 2018 (as of 12:08 PM GMT-4 ; Source: Google finance) after the company posted lower than estimates for the third quarter of 2018 and after the company reduces its full-year 2018 outlook primarily due to continued chassis availability issues and impact of longer material lead times. Third quarter net income of $18.3 million, which is an increase of 20.4% compared to the prior year quarter. End markets remain positive with total backlog of $1,276.0 million as of July 31, 2018 an increase of 34.1% compared to the prior year quarter

REVG in the third quarter of FY 18 has reported the adjusted earnings per share of 38 cents, missing the analysts’ estimates for the adjusted earnings per share of 46 cents. The company had reported the adjusted revenue growth of 0.4 percent to $597.7 million in the third quarter of FY 18, missing the analysts’ estimates for revenue of $654.50 million.

Moreover, Commercial segment net sales were $157.6 million in the third quarter 2018, an increase of 2.1%, from $154.4 million in the third quarter of 2017. The increase in net sales was due primarily to an increase in shuttle bus, school bus, mobility van and terminal truck units sold compared to the prior year period. Commercial sales were also negatively impacted by chassis availability in the quarter, specifically in the Bus division. Commercial backlog at the end of the third quarter was $420.0 million, an increase of 14.6% compared to $366.4 million at the end of fiscal year 2017, and up 5.7% from $397.2 million at the end of the second quarter 2018. Further, Recreation segment net sales were $197.3 million in the third quarter 2018, an increase of $19.4 million, or 10.9%, from $177.9 million in the third quarter 2017. The increase in net sales was due to net sales attributable to the recent acquisition of Lance and increases in net sales across the brand line-up except for Class A motorhomes, which declined compared to the prior year period due to a strategic reduction in the number of models produced and the timing of new model year introductions this fiscal year. Excluding the impact of net sales from Lance, Recreation segment net sales decreased by $15.2 million compared to the prior year period, as a result of the reduction in Class A unit volume. Sales for all other Recreation segment product categories were up in the third quarter 2018 by double-digit percentages versus the same period in the prior year. Recreation segment backlog at the end of the third quarter 2018 was $249.5 million, which was up 72.3% from $144.8 million at the end of fiscal year 2017, and up 4.2% from the end of the second quarter 2018.

For the FY 18, REVG expects revenue to be in the range of $2.4 to $2.5 billion, adjusted EBITDA to be between $160.0 to $170.0 million and adjusted Net Income to be between $80.7 to $88.8 million.