Harley-Davidson Inc (NYSE: HOG)
Harley-Davidson reported upbeat third-quarter earnings early Tuesday, sending its shares up 4.5% premarket.
Improved international sales and lowered expenses pushed its earnings up 67% to $113.9 million from $68.21 million in the earlier-year quarter. However, its US motorcycle sales declined 13.3% during the quarter.
The Milwaukee, WI-based motorcycle maker has surpassed the expectations of Wall Street analysts for the seventh consecutive quarter. Harley also stuck to its full-year shipments outlook.
In the past few years, the company has struggled against slumping motorcycle ridership, especially among its younger customer base. Analysts say that young customers are opting for ride lighter motorcycles over traditional big bikes like those made by Harley-Davidson.
The quintessential American brand also found itself at loggerheads with President Donald Trump in June after announcing that it would move some of its production abroad to avoid EU regulatory tariffs. Trump called for a boycott of the company saying that it was using the tariffs as an excuse for shifting manufacturing overseas.
HOG stock has dropped 24% this year, while the S&P 500 index has climbed 3 percent. The shares have declined 22% year over year.
HOG Earnings & Outlook
Earnings jumped to $113.86 million, or $0.68 per share during the quarter, from $68.21 million, or $0.40 per share in Q3 of the previous year. Earnings, adjusted for one-time items, came in at $0.78 per share.
Sales were $1.32 billion, up from $1.15 billion in the same period a year ago. Analysts were expecting adjusted earnings of $0.53 per share on sales of $1.07 billion, according to figures compiled by Refinitiv. The company is still expecting to ship between 231,000 to 236,000 motorcycles in 2018.
Harley-Davidson CEO Comments
“Third quarter progress tracked to our plans with numerous highlights including another quarter of improved international retail sales growth and increased year-over-year earnings per share. We unveiled our More Roads to Harley-Davidson accelerated plan for growth, and made strong progress already through September,” commented Matt Levatich, President and Chief Executive Officer, Harley-Davidson.
“As we manage our business with resilience in a challenging time in our history, we are leveraging our strengths for a more promising road ahead. We are investing to build the next generation of Harley-Davidson riders and we are optimizing our business to drive profitability and cash flow. Through September, cash flow was very strong and revenue was up over 3 percent despite lower motorcycle shipments.”
Harley-Davidson, Inc. Company Profile
Harley-Davidson, Inc. engages in the manufacture and sale of custom, cruiser and touring motorcycles. It operates through the Motorcycles and Related Products; and Financial Services segments.
The Motorcycles and Related Products segment manufactures, designs, and sells at wholesale on-road Harley-Davidson motorcycles as well as motorcycle parts, accessories, general merchandise, and related services.
The Financial Services segment comprises of financing and servicing wholesale inventory receivables and retail consumer loans, primarily for the purchase of Harley-Davidson motorcycles.
The company was founded by William Sylvester Harley, Arthur Davidson, Walter C. Davidson, Sr. and William A. Davidson in 1903 and is headquartered in Milwaukee, WI. – CNN Money
