Harley-Davidson, Inc. | $HOG Stock | Shares Rally Amid Q2 Profit Drop & Lowered Guidance

Harley Davidson

Harley-Davidson, Inc. (NYSE: HOG) 


Harley-Davidson, Inc. released downbeat second-quarter earnings before the opening bell Tuesday. However, investors appeared to be impressed by the results, pushing the stock up $3.37, or 8.13% to $44.82 in the early hours of regular trading.

Last month, the company announced it would move some production abroad in order to avoid the regulatory tariffs imposed by the EU on US motorcycles.

Harley-Davidson expects the tariffs to weigh down on its profits, prompting it to cut its profit guidance.

HOG Earnings & Outlook

The motorcycle maker saw its net income drop to $242.3 million, or $1.45 per share for the quarter, from $258.9 million, or $1.48 per share, in the second quarter of last year.

Adjusted for one-time items, earnings per share was $1.52, ahead of analyst estimates of $1.41 per share.

Net sales dipped to $1.525 billion from $1.577 billion in the year-ago quarter. Analysts surveyed by Thompson Reuters expected the motorcycle maker to post net sales of $1.424 billion.

The company said US retail motorcycle revenue dropped by 6.4%, while international retail revenue grew by 0.7% in the quarter.

Motorcycle shipments came in at 72,593, down 11%. The company maintained its 2018 shipments outlook range of 231,000 to 236,000 motorcycles.

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Harley-Davidson CEO Comments

Harley-Davidson President and Chief Executive Officer, Matt Levatich, made the following remarks in a statement: “Our results in the second quarter reflect business performance that is in line with our expectations. With the focus of every employee and dealer, we are making progress building the next generation of Harley-Davidson riders in line with our long-term objectives. Our manufacturing optimization, demand-driving investments and commitment to manage supply in line with demand remain on target and continue to strengthen our business.

Levatich continued, “We will take bold actions that better leverage our vast capabilities and competitive firepower –excellence in product development, manufacturing, brand and our great dealer network. We will motivate our existing loyal riders and inspire future riders who are not even thinking about two-wheeled freedom.”

Harley-Davidson, Inc. Company Profile

Harley-Davidson engages in the manufacture and sale of touring and cruiser motorcycles. It operates under the Motorcycles & Related Products segment, and Financial Services segment.

Under the Motorcycles & Related Products segment, the company designs, makes, and distributes on-road company-branded motorcycles.

It also offers motorcycle accessories and parts, including cosmetic and mechanical accessories, and replacement parts; and general merchandise, such as riding gear and MotorClothes apparel.

The segment sells its products through e-commerce channels as well as a network of independent dealers in the U.S., Europe, Canada, the Middle East, Latin America, the Asia-Pacific, and Africa.

The Financial Services segment offers retail financing solutions, such as installment lending for purchase of used and new company-branded motorcycles; and wholesale financing solutions, including open account and inventory financing of motorcycles, accessories and parts.

It also provides point-of-sale protection products, including motorcycle maintenance protection, extended service contracts, and motorcycle insurance.

Harley-Davidson, Inc. was founded in 1903 by Walter C. Davidson, Sr., Arthur Davidson, William A. Davidson and William Sylvester Harley. –Reuters