Trump Tariffs Continue To Weigh On Harley-Davidson Profits


Harley-Davidson Inc (NYSE: HOG)

Shares of Harley-Davidson lost as much as 9.5% on Tuesday after the motorcycle maker posted fiscal 2018 fourth-quarter earnings that fell shy of the estimates of Wall Street analysts. Investors appear to be hitting the breaks on company as it continues to struggle with slumping sales mainly in the United States.

Motorcycle sales came in lower overall for the three months to December 31, 2018. The American icon also rattled investors after saying that it expects to ship only about 220,000 motorcycles this year, which would be the lowest amount since 2010.

Harley-Davidson is getting punished by the blowback of President Donald Trump’s global trade policies, a move that promoted the company to consider setting up factories overseas a few months ago.

HOG Earnings & Outlook

The Milwaukee-based company posted earnings $495,000 for the quarter, compared with $8.3 million, or $0.05 a share, in the prior year period. Excluding restructuring plan costs and other special items, earnings came to $0.17 per share.

Analysts polled by Refinitiv were expecting adjusted earnings of $0.28 per share. Revenue dropped to $955.6 million from $1.05 billion last year and was below analysts’ estimates of $1.05 billion.

Motorcycle sales in the US totaled 20,849, down 10.1% from 23,195 in the earlier-year quarter. Asia Pacific and EMEA regions also posted declines in motorcycle sales. Global motorcycle sales came to 39,311, down 6.7% from 42,142.

Looking ahead, the company views fiscal 2019 first-quarter motorcycle shipments of between 53,000 to 58,000, and approximately 217,000 to 222,000 for the full year.

Harley-Davidson CEO Comments

“In 2018 we delivered value to our shareholders through improved earnings and cash from operations. The challenges we experienced during the year reinforced the commitment we have for our More Roads to Harley-Davidson accelerated plan for growth,” said Matt Levatich, president and chief executive officer, Harley-Davidson, Inc.

“Our plan addresses the challenges of today and the opportunities we see for growth ahead, and we are energized by the momentum we are building. New and different people, riders and non-riders, are taking notice of Harley-Davidson and the thrill of riding.”

Harley-Davidson, Inc. 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