Harley-Davidson, Inc. (HOG) Falls on Higher than Expected Earnings Drop
Shares of Milwaukee, Wisconsin, based Harley Davidson, Inc. (HOG) fell on Tuesday, against the backrop of a slightly lower day in stocks overall. Harley-Davidson's stock was down 13.92%, falling $7.80 per share, to close at $48.25, on volume of 31,739,422 shares. The company's fell on lower than expected earnings for the third quarter, as well as the announcement that the company's motorcycle sales will be flat for 2015.
On Tuesday, the company announced that its third quarter, 2015, earnings came in at $140.3 million, or $0.69 per share. This reflected a decline from $150.1 million for the same period a year ago, though earnings per share were identical due to a lower number of outstanding shares in the current quarter. Analysts had expected a decline in revenues, but had forecast earnings of $0.78 per share for the quarter. Revenues, expected to come in at $1.2 billion, came in at $1.14 billion, representing a 1% increase in revenues over the same quarter a year ago.
Meanwhile, the company also reported that sales of its trademark motorcycles would come in lower than expected for the entire year. The company now expects to ship between 265,000 and 270,000 motorcycles to dealers and distributors worldwide for 2015. This represents a decline of as much as 2% from 2014 sales, and a decline from earlier projections of sales of between 276,000 and 281,000 for the full year. On a brighter note, the company expects to ship between 47,000 and 52,000 motorcycles in the fourth quarter, compared to 47,157 motorcycles shipped in the fourth quarter of 2014.
For the third quarter, motorcycle retail sales were down by 1.4% worldwide compared to the same period a year ago. This includes a decline of 2.5% in US sales, offsetting a gain in international sales of 0.9%. The company responded to the lower sales numbers by announcing that it will reduce staff, though it didn't provide any numbers for the job cuts. Those reductions, plus reorganization costs, are expected to result in a one time charge of $30 million to $35 million during the fourth quarter.
“We expect a heightened competitive environment to continue for the foreseeable future, and now is the time for us to dial things up with significant additional investments in marketing and product development,” said Harley-Davidson, Inc. President and Chief Executive Officer, Matt Levatich. “We have a strong plan, built on our incredible foundation, to further assert Harley-Davidson’s substantial market leadership and accelerate growth. We have great confidence in our plans to drive demand and grow our reach and impact with customers globally.”
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