Harley-Davidson 3Q profit falls on lower shipments
NEW YORK — Harley-Davidson Inc. said Thursday that its third-quarter profit slid 84 percent on fewer motorcycle shipments and recession-related difficulties in getting loans for its customers.
The motorcycle manufacturer also plans to stop making Buell motorcycle products and will sell its MV Agusta division as it looks to concentrate efforts more on its namesake brand.
“We believe we can create a bright long-term future for our stakeholders through a single-minded focus on the Harley-Davidson brand,” CEO Keith Wandell said in a statement.
The Milwaukee-based company will sell off its remaining Buell inventory, including motorcycles, accessories and apparel, through its authorized dealerships while supplies last. Dealerships will continue to provide replacement parts and service for Buell bikes, with warranty coverage continued as well. The line’s closing will likely result in a $125 million one-time cost for Harley-Davidson, with approximately $115 million expected this year.
The move means about 100 salaried workers and about 80 hourly positions will be eliminated, with most of the cuts occurring by Dec. 18.
Shares fell 80 cents, or 3.1 percent, to $25.46 in electronic premarket trading.
Harley-Davidson — which has already implemented production and job cuts this year — earned $26.5 million, or 11 cents per share, for the period ended Sept. 27, down from $166.5 million, or 71 cents per share, a year ago.
Quarterly results included a $14.2 million, one-time fixed-asset impairment charge for Buell and an $18.9 million goodwill impairment charge related to its plan to sell off Varese, Italy-baesd MV Agusta, which is known for its sport motorcycles.
Accounting for Buell and MV Agusta, Harley-Davidson now expects restructuring charges of $215 million to $245 million between 2009 and 2010 — a $55 million increase from its prior forecast. Annual savings from the restructuring efforts are targeted between $140 million and $150 million.
Third-quarter sales dropped 21 percent to $1.12 billion from $1.42 billion, but its retail motorcycle sales decline of 21.3 percent was not as steep as the previous quarter’s 30.1 percent dropoff.
Analysts surveyed by Thomson Reuters, whose estimates typically exclude one-time items, forecast profit of 21 cents per share on revenue of $1.1 billion.
Harley-Davidson said the economic downturn has crimped the retail and wholesale loan performance of lending arm, Harley-Davidson Financial Services. The unit has struggled as tighter credit markets have made it harder for customers to get loans and it has had a difficult time bundling and selling “securitized” loans, which it has relied on for funding.
The financial services division posted an operating loss of $31.5 million for the quarter on increased interest expense and a higher provision for credit losses in its retail and wholesale portfolios.
Harley-Davidson also narrowed its full-year motorcycle shipment expectations. The company now anticipates shipping 222,000 to 227,000 Harley-Davidson motorcycles to dealers, including 35,000 to 40,000 during the fourth quarter. Previously, the bike maker estimated it would ship between 212,000 and 228,000 motorcycles to its dealers and distributors worldwide for the year.
Related News
MV Agusta, pockets deeper after Harley-Davidson purchase, unveils 1st new models in 10 yearsSeptember 30th, 2009 MV Agusta unveils first new models in 10 yearsNEW YORK — The Italian sport bike company bought by Harley-Davidson Inc. last year is unveiling its first new models in 10 years, saying that its purchase by Harley is starting to pay off.
Luxury retailer Tiffany's 2nd-qtr profit falls on lower sales, still beats analysts' estimatesAugust 28th, 2009 Tiffany 2Q profit falls, but tops viewNEW YORK — Tiffany & Co. says its second-quarter profit fell 30 percent as sales slipped, but the results beat analysts' estimates.
Harley-Davidson to sell motorcycles in India in 2010, hopes growing economy will speed salesAugust 27th, 2009 Harley-Davidson to sell motorcycles in IndiaNEW YORK — Harley-Davidson Inc. said Thursday it will begin selling motorcycles next year in India, the world's second-largest motorcycle market, where the company hopes its iconic, heavyweight bikes will find a niche among the country's rising middle class.
IKB Deutsche Industriebank posts €19 million Q1 net profit; loan loss provisions increaseAugust 24th, 2009 German bank IKB posts €19 million Q1 net profitFRANKFURT — German lender IKB Deutsche Industriebank AG said Monday it returned to a net profit in its fiscal first quarter after booking big financial write-downs last year, though its loan loss provisions more than doubled during the beginning of its 2009 financial year. The Duesseldorf-based bank said its profit of €19.4 million ($28 million) in its April-June fiscal first quarter compared with a net loss of €517 million in the year-ago period.
Harley-Davidson weighing sites in 4 states for possible relocation of Pa. plantAugust 21st, 2009 Harley-Davidson looks at 4 states in plant moveNEW YORK — Harley-Davidson Inc. is considering sites in four states for a possible relocation of its main motorcycle plant in Pennsylvania, a company spokesman said Friday.
Genesee & Wyoming posts 1.2 percent drop in July traffic on lower pulp and paper shipmentsAugust 14th, 2009 Genesee & Wyoming July traffic falls 1.2 percentGREENWICH, Conn. — Regional freight railroad operator Genesee & Wyoming Inc.
WesBanco revises Q2 results lower due to bad real estate loanAugust 10th, 2009 WesBanco revises Q2 results lowerWHEELING, W.Va. —WesBanco Inc.
Taiwan's chipmaker UMC posts first quarterly profit in a year as demand improvesJuly 29th, 2009 Taiwan chipmaker UMC returns to profit in Q2TAIPEI, Taiwan — Taiwan's United Microelectronics Corp., the world's second-largest contract chipmaker by revenue, on Wednesday posted its first quarterly profit in a year on stronger customer demand. The company's net income was NT$1.55 billion ($47 million) for the April-June quarter, down 35.5 percent from a year earlier.
S&P cuts ratings on Harley-Davidson, says motorcycle sales falling faster than expectedJuly 27th, 2009 S&P downgrades ratings on Harley-DavidsonNEW YORK — Credit ratings agency Standard & Poor's Ratings Services on Monday cut its ratings on Harley-Davidson Inc., citing the decline in sales at the iconic motorcycle maker. S&P cut Harley's corporate credit rating to BBB from BBB+.
US Bancorp 2nd-qtr profit falls 50 percent on higher credit costs, charge to repay gov't loanJuly 22nd, 2009 US Bancorp 2Q profit tumbles 50 percentMINNEAPOLIS — U.S. Bancorp says its second-quarter profit dropped 50 percent as credit costs rose and it repaid a government loan.
Whirlpool 2nd-quarter profit falls on softer consumer demand for home appliancesJuly 22nd, 2009 Whirlpool 2Q profit falls on lower consumer demandBENTON HARBOR, Mich. — Whirlpool, the world's largest maker of major home appliances, says its second-quarter profit fell 33 percent as consumer demand for its products significantly weakened.
Actor James Caviezel suffers minor injuries in Washington state motorcycle accidentJuly 17th, 2009 Actor James Caviezel hurt in motorcycle accidentLEAVENWORTH, Wash. — The Washington State Patrol says actor James Caviezel suffered cuts and bruises when a man hurled a bicycle into the path of his Harley Davidson motorcycle.
Harley-Davidson makes deeper cuts as 2nd-qtr income falls 91 percent on lower bike shipmentsJuly 16th, 2009 Harley-Davidson deepens cuts as 2Q profit tumblesNEW YORK — Back when the good times rolled, Harley-Davidson Inc. couldn't keep up with demand for its flashy high-end motorcycles.
Harley-Davidson considering moving York, Pa., production facility as part of cost-cuttingMay 13th, 2009 Harley-Davidson weighing moving production plantNEW YORK — Harley-Davidson Inc. is considering closing its main motorcycle assembly facility in Pennsylvania and moving production elsewhere as it aims to lower costs and cope with a sales downturn, a company spokesman said Wednesday.
Chevron says first-quarter profit falls 64 percent on lower crude, gas pricesMay 1st, 2009 Chevron 1Q profit falls 64 pct as oil prices fallHOUSTON — Chevron Corp. says its first-quarter profit fell 64 percent as it, along with competitors, was stung by lower oil and natural gas prices.
Loading ...