Harley-Davidson (HOG) announced earnings for third quarter that fell from last year.
The company said its profit totaled $114.07 million, or $0.64 per share. This was down from $140.35 million, or $0.69 per share, in last year’s third quarter. Analysts had expected the company to earn $0.64 per share, according figures compiled by Thomson Reuters.
Harley-Davidson 3rd Quarter Earnings At A Glance:
-Earnings (Q3): $114.07 Mln. vs. $140.35 Mln. last year.
-Earnings Decline (Y-o-Y): -18.7%
-EPS (Q3): $0.64 vs. $0.69 last year.
-EPS Decline (Y-o-Y): -7.2%
-Analysts Estimate: $0.64
-Revenue (Q3): $1.27 Bln vs. $1.32 Bln last year.
-Revenue Change (Y-o-Y): -3.8%
Harley-Davidson worldwide retail motorcycle sales in the third quarter were down 4.5%, primarily on weak U.S. industry trends. Harley-Davidson retail motorcycle sales in the U.S. were down 7.1% compared to the year-ago quarter, with the overall U.S. industry also down for the same period. Harley-Davidson’s U.S. market share for the quarter was 52.3% in the 601cc-plus segment, essentially flat compared to the third quarter in 2015. Harley-Davidson international retail sales increased by 1.0 percent over the prior year quarter.
Recognizing the continued slower industry growth in the U.S., the company will streamline its operations in the fourth quarter of 2016. It expects to incur expenses of approximately $20 million to $25 million in the fourth quarter, primarily for employee separation and reorganization costs.
Harley-Davidson continues to expect to ship 264,000 to 269,000 motorcycles in 2016, which is approximately down 1% from 2015. In the fourth quarter of 2016, the company expects to ship 44,200 to 49,200 motorcycles compared to 48,149 motorcycles shipped in the year-ago period. The company continues to expect full-year 2016 operating margin of approximately 15 to 16% for the Motorcycles segment. The company continues to expect 2016 capital expenditures for Harley-Davidson, Inc. of $255 million to $275 million.
How much of this was people waiting on the new motor to come out before buying a new bike? We’ll see next year when they start putting the M8 in more models.
Now let’s see how Polaris is doing.
Not a surprise.
As much as I want HD to succeed, I simply don’t see the introduction of M8’s turning anything around for them. Yes, there will be limited number of people who have the means to purchase M8’s immediately, but there are simply not enough people with that level of disposable income to help MoCo. I foresee a slow transition of TC owners into M8’s…..but nothing immediate, and for certain segments of owners, never at all.
If you look at what is going on in the luxury market now, especially in the States, families are reeling back to really 1 luxury item, and that is cars…be it a BMW, Mercedes, Lexus, Cadillac, etc….Used to be all of the above, plus a new Harley and a Rolex. Those days are over. In addition, the used motorcycle market is absolutely flooded….metrics and Harley’s. And for Harley’s….I bet vast majority of owners are perfectly content with rolling around in their TC’s and willing to buy a gently used one vs. going into a M8.
Perhaps they can push some volume internationally, as some of the developing countries in Asia continue to rise, but it will be limited as growth is not as steep as it once was.
I don’t have a good answer on what MoCo needs to do, but cutting back, buttoning down the hatches is a good start. Focus on quality product, putting more perceived value into their bikes (like making some more options standard), perhaps work on a true game-changer product.
A profit is still a profit right????
@mkv – Not really. If their stock isn’t part of your portfolio, you made zero profit.
they need to get back to being the leader and stop flowing the other guys horse power and performance is what biker are looking for. get rid of the yuppies running the show get bikers back in charge,
Listen to me gentlemen. The LiveWire will save Harley at the last minute. In 2 years.
still huge numbers…just not going the right direction.. I don’t know that the M8 will be the savior they were hoping for…it`ll probably help when its placed in all the models though, typically a new motor platform does push the sales numbers up…for a while..we are an aging group, HD`s customers..
Election Year.. Simply people hold onto their money until after the election.
I purchased my 300 shares at the ipo for 10 bcks. I frankly never thought it would be worth what it is today,not counting the numerous slpits.
It would be nice if this could be written off as some blip on the radar abnormality and next year everything will be back to normal. But I highly doubt it. Harley put all their eggs in the “lifestyle” basket and it worked brilliantly in the short term. The bikes didn’t have to be good, they just had to look good and sound good, it was all just an image. The problem is that made owning a Harley a fad, the “in” thing is never the “in” thing forever. Sooner or later something else comes along cooler than what was cool. And what was cool becomes passe’. They’ll still sell a lot of bikes for a long time to come and will probably be around another 100 years with a bailout here and a reorganization there, but I think the days of 300k bikes a year and the kind of market share dominance they had a decade ago are gone for good.
113 years in the business of making and selling great line of motorcycles. They have 52.3% 0f the TOTAL market 600cc and larger. They are making $$$ despite all the competition. They must be doing something right…
It’s useless to compare the company to itself. Until there’s a graph with Harley and its competitions’ sales shown it on it, we won’t have a clear picture.
They better keep their core customers happy and impressed. I am talking about generational owners, legacy owners. I am willing my fathers motorcycle to my Grandson. I have been an owner of Harley Davidsons for over 39 years but when they asked me to get on a waiting list in the mid 90’s I went out and bought a new Triumph. When they didn’t treat me like they appreciated my business I bought a new Valkyrie. I still own several HD’s but nothing new from a dealership. In other words I voiced my displeasure with my wallet and if they continue to eliminate good union jobs I will continue to do so. I think a show of good faith would be to go back to providing a free copy of Enthusiast monthly.
18bravo: “@mkv – Not really. If their stock isn’t part of your portfolio, you made zero profit.”
Damn man, that’s brilliant. You got any investing advice you could share?
HD Dealers need some guidelines set from the top “other than get what you can if you may.”
All dealers need to know their competition and operate on somewhat of an even keel assuming they do not want the dealers located 80 and 100 miles away to get the deal.
Good example Seminole Harley and Space Coast Harley has had the the best deals for me. The newest bike I have came from Space Coast Harley. Daytona Harley was $4500 LOW on the trade and $1400 HIGHER on price making Daytona Harley an ADDITIONAL $5900 more for the same bike. Plus Daytona Harley was 3 points HIGHER on financing against an 830 FICO…go figure.
HD’s Numbers speak volumes….BUT transparency, fair margins and good service gets my business every time!. I am in the market starting to look for another bike now..maybe that will help the stock rebound?
Boss Hawg
It’s pointless to compare a company like H-D to itself. Until there’s a graph charting them AND their competitions’ unit sales, one can’t get a true picture. Sometimes you need to step back to see it all.
Harley maintained its market share in the qtr. Just an FYI for you armchair market and manufacturing strategists.
Woody’s – Very good point as usual.
Harley finally has real competition with Polaris. This is the beginning of the market balancing out. Harley will probably still be the biggest company on the block, but Polaris is simply grabbing its share of the pie. That’s just the way life works. We, as buyers of American motorcycles are the winners because competition simply makes things better and keeps prices more competitive. So we get better bikes at hopefully more competitive prices. Yay for us.
Agreed with almost everyone before me
I love when this gets posted !!!
The faithful come to the defense of the Mo-Co, (Like they need it !)
Some predict its imminent destruction & doom !!
Most of us just appreciate Polaris because not there is some REAL competition
& it’ll make BOTH brands better !!!
Polaris numbers will be out tomorrow let’s see what those bring before the panic sets in !!!
BWHAHAHAAA !!!!
I meant now there is real competition
Blackmax, I agree with you on all points. One really meaningful number would be how many UNITS were sold either than $$$ sold by their motorcycle operations. If Polaris would just give us units sold for Victory and Indian, we’d be able to make fair and accurate comparisons.
BMax, not defending the MoCo at all, just commenting on the company in the article. If H-D disappeared, I’d still find something to ride. Of the many bikes I’ve owned only 3 were Harleys. I’d like to see more info out of fairness, but I think we know why Polaris doesn’t release units sales and Trump doesn’t release his tax returns-not required by law and no good reason to help the other side.
Sorry for the earlier multiple posts, for some reason the first didn’t show up for hours.
Harley remains 53%, nothing to boost about. Thats a slip. everyone on this post makes points of substance over form.
Blackmax…….probably wont get to see anything but percetages..
FYI, Polaris will release its third quarter 2016 financial results on Tuesday, October 25, 2016, and will hold a webcast and conference call at 9:00 a.m. Central Time on the same day to discuss the results.
Polaris has never released # of units sold in any quarterly reports. That goes for motorcycles, ATV’s and snowmobiles. I think the closest you will see to production numbers is when they did a recall related to the Thunder Stroke 111 engine and that was only for the air cooled Indians, that doesn’t include the scouts or Victorys.
For me the telling thing is the HD continues to report market decline while Polaris, BWM and Triumph are reporting growth. Hell Can-Am is even has a 2 wheeler in the works!
HD needs to stop thinking that bikers will just pay any price for the name Harley-Davidson on the tank and maybe start pricing their bikes competitively, doing sales events, discounts, loyalty programs, something to get more bikes off the showroom floor.
BlkBkr, HD maintained it’s market share. So, it’s not telling anything.
Unless it’s a failure, a young company will always have tremendous growth by %, it’s really not a good indicator of anything by itself. You need a timeline showing apples to apples, all charted together. If I open a hot dog cart and sell 20 dogs the first day and 40 the second, I can say my sales have doubled but it doesn’t mean anything to the Burger King down the street.
Polaris will release 3rd qtr financials tomorrow 10/25, be very interesting to see.