Harley 2Q profit tumbles on fewer shipments

Thu Jul 17, 2008 7:25 AM EDT
advertisement

NEW YORK — Harley-Davidson Inc. said Thursday its second-quarter profit fell sharply as a weak economy, record-high gas prices and lower consumer confidence continued to hobble the iconic motorcycle maker's shipments and sales.

But the Milwaukee-based company stood by its outlook for the year, and its earnings beat Wall Street's expectations. Shares of Harley climbed in morning trading.

Harley said its earnings for the quarter ended June 29 fell 23 percent to $222.8 million, or 95 cents per share, from $290.5 million, or $1.14 per share, in the same quarter last year.

Revenue dropped nearly 3 percent to $1.57 billion from $1.62 billion in the year-ago quarter.

The results beat Wall Street estimates. Analysts polled by Thomson Financial expected earnings of 76 cents per share on $1.4 billion in revenue, on average.

Like nearly all vehicle makers, Harley-Davidson has grappled with the challenges posed by gas prices and the economy. Harley's sales are closely tied to discretionary spending, which has declined sharply.

In April, Harley said it would respond by cutting shipments to its dealers and distributors by the thousands. Harley also said in April it would idle plants and change production schedules, resulting in the loss of 370 unionized positions.

Chief Executive Jim Ziemer said in a conference call with investors that Harley finalized those work force reductions during the second quarter, which he expects will save the company between $35 to $40 million starting in 2009.

Harley said shipments of its motorcycles to dealers and distributors fell more than 15 percent to 80,326, primarily due to the shipment cuts it announced three months ago. Retail sales fell 3.6 percent from the year-ago quarter.

However, the company said its international sales grew sharply, reflecting the company's increasing focus on overseas markets as weakening demand crimps U.S. sales. Harley said sales in its international markets jumped 11.2 percent during the quarter, and overseas sales now account for just over a third of all sales.

"We continue to see strength in international retail sales, and we believe that the international markets will continue to play a growing role in the overall picture at Harley-Davidson," Ziemer said.

Last week, Harley announced the purchase of Italian motorcycle maker MV Agusta Group for about $109 million as part of an effort to expand into the European market.

Harley maintained its full-year outlook of between $3 and $3.18 per share. Analysts are looking for earnings of $3.05 per share for the year, on average.

Shares of Harley rose 84 cents, or 2.3 percent, to $37.02, in morning trading Thursday.

© 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
  • 1 Vote
  • Enjoy this article? Help vote it up the 'Vine.

Back To Top

Published to:

Related Articles
Coca-Cola drinkers to pay more after Labor DayAssociated PressThu Jul 170Comments
PC shipments grew faster than expected in 2QAssociated PressWed Jul 161Comments
Gannett 2Q profit falls by 36 percentAssociated PressWed Jul 160Comments
EBay 2Q profit rises 22 percent but outlook softAssociated PressWed Jul 160Comments
What's this?
Who's leading the conversation?
This visualization below allows you to see the impact that each user has on the current conversation. The top row contains the group of users who have had the most impact, the 2nd row the group of users who have had the 2nd most impact (et cetera). Users with similar impact are grouped together, and the average score of the group is shown to the left of the group. The author of the article is also shown on the left, in their corresponding group. Each user's score is based on the number of comments the user has made plus the number of votes their comments have received. The scores are calculated relative one another, so while their absolute value is not particularly important, their relative difference does indicate a larger difference in impact on the conversation.
0.5
{"commentId":2218761,"authorDomain":"tigerblade"}
tigerblade
Harley also said in April it would idle plants and change production schedules, resulting in the loss of 370 unionized positions. ...will save the company between $35 to $40 million starting in 2009.
Harley announced the purchase of Italian motorcycle maker MV Agusta Group for about $109 million as part of an effort to expand into the European market.

Must be nice for those workers to see their yearly salaries being spent well.

Something I noticed this article doesn't mention - when Harley announced those workforce reductions, they cut about that many non-production (aka office) jobs as well. Sources within the company make it sound as though these cuts have been made but not finalized, whatever that means.

{"commentId":2218761,"threadId":"314923","contentId":"1674401","authorDomain":"tigerblade"}
    Reply#1 - Thu Jul 17, 2008 9:21 PM EDT
    {"canLink":false,"threadId":"314923","isPrivate":false}
    Leave a Comment:
    You're in Easy Mode. If you prefer, you can use XHTML Mode instead.
    Newsvine Privacy Statement
    As a new user, you may notice a few temporary content restrictions. Click here for more info.
    {"threadId":"314923","contentId":"1674401"}
    Start TrackingStart Tracking
    Stop TrackingStop Tracking
    Back To Top | Front Page