Harley-Davidson Q3 Earnings Miss Views, Shares Tumble

Shares of Harley-Davidson Inc HOG dropped over 8 percent in pre-market trading after the company reported weaker-than-expected earnings for the third quarter and lowered its motorcycle shipment outlook for the full year. The Milwaukee, Wisconsin-based company posted quarterly net income of $140.3 million, or $0.69 per share, compared to $150.1 million, or $0.69 per share, in the year-earlier period. Its consolidated revenue rose to $1.32 billion from $1.30 billion. However, analysts were expecting earnings of $0.78 per share on revenue of $1.21 billion. The average estimate among 40 Estimize users was for earnings of $0.80 per share and revenue of $1.21 billion. Dealer new motorcycle sales declined 1.4 percent worldwide for the quarter, with sales dropping 2.5 percent in the U.S. and rising 0.9 percent internationally. Its revenue from motorcycles slipped to $812.4 million from $815.4 million, while revenue from motorcycle parts and accessories gained to $252.2 million from $239.7 million. Revenue from general merchandise declined to $69.0 million from $69.3 million. Gross margin shrank to 34.6 percent in the third quarter from 34.9 percent in the third quarter. At the end of the third quarter, cash and marketable securities climbed to $1.42 billion, versus $1.04 billion at the end of year-ago 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 Matt Levatich, President and Chief Executive Officer, Harley-Davidson, Inc. "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." For the full year, the company now projects to ship 265,000 to 270,000 motorcycles to dealers and distributors worldwide, compared to earlier forecast of 276,000 to 281,000 motorcycles. For the fourth quarter, Harley-Davidson projects to ship 47,000 to 52,000 motorcycles, versus 47,157 motorcycles shipped in the year-earlier period. Harley-Davidson shares dipped 8.14 percent to $51.49 in pre-market trading.