A few minutes ago, this morning October 18, 2011 at 8 am. Harley-davidson announced its 3rd quarter results.
Harley (NYSE: HOG) reported continued strong improvement in earnings and dealer retail sales in the third quarter of 2011 and through nine months, compared to 2010. Worldwide Harley-Davidson® Retail New Motorcycle Sales Rise, Led by 5.4 Percent Growth in U.S. Earnings Climb to $0.78 Per Share on Motorcycle Shipment Growth, Improved Motorcycle Operating Margin and Financial Services Results
Income from continuing operations in the third-quarter 2011 rose 95.9 percent to $183.6 million, or $0.78 per share, compared to income of $93.7 million, or $0.40 per share from continuing operations in the year-ago quarter. Third-quarter operating income from Motorcycles and Related Products grew 78.0 percent on higher shipment volume and operating margin improvement, while operating income from Financial Services grew 21.9 percent on continued improvement in credit performance, compared to the third quarter of 2010.
Retail sales of new Harley-Davidson motorcycles grew 5.1 percent worldwide in the third quarter compared to the prior-year period, led by a 5.4 percent rise in the U.S.
“We are pleased with our sustained progress and we continue to realize strong momentum in the transformation our business,” said Keith Wandell, President and Chief Executive Officer of Harley-Davidson, Inc. “Two years ago we embarked on our strategy to focus solely on the Harley-Davidson brand, provide the flexibility required in today’s market and make Harley-Davidson lean, agile and more effective than ever at delivering remarkable products and extraordinary customer experiences. Today, we continue to see the positive results of the course we have charted,” Wandell said. “The changes underway in manufacturing, product development and retail capability will increasingly enable Harley-Davidson to be customer-led like never before.”
On a worldwide basis, third-quarter retail Harley-Davidson new motorcycle sales grew 5.1 percent compared to last year’s third quarter to 61,838 units. Dealers sold 42,640 new Harley-Davidson motorcycles in the U.S., a 5.4 percent increase compared to last year’s third quarter. In international markets, dealers sold 19,198 new Harley-Davidson motorcycles during the third quarter, an increase of 4.4 percent compared to the year-ago period.
Through nine months, worldwide retail sales of new Harley-Davidson motorcycles increased 4.9 percent compared to the prior-year period to 194,829 units. U.S. retail sales of new Harley-Davidson motorcycles increased 4.7 percent to 127,930 units through three quarters compared to the year-ago period. In international markets, retail sales of new Harley-Davidson motorcycles increased 5.2 percent to 66,899 units for the first nine months of 2011 compared to 2010. Through nine months, industry-wide U.S. heavyweight new motorcycle (651cc-plus) retail unit sales increased 3.7 percent, compared to the year-ago period.
Revenue from Motorcycle Parts and Accessories (P&A) totaled $235.7 million during the quarter, up 7.6 percent, and revenue from General Merchandise, which includes MotorClothes® Apparel and Accessories, was $69.3 million, up 8.2 percent compared to the year-ago period.
Gross margin was 33.7 percent in the third quarter of 2011, compared to 34.9 percent in the third quarter of 2010. Third-quarter operating margin was 14.7 percent, compared to 9.3 percent in the third quarter of 2010.
Nine-Month Segment Results: Through the first nine months of 2011, the Company shipped 182,387 Harley-Davidson motorcycles to dealers and distributors, a 9.9 percent increase compared to last year’s 166,013 units for the period.
Harley-Davidson continues to expect to ship 228,000 to 235,000 Harley-Davidson motorcycles to dealers and distributors worldwide in 2011, including 45,500 to 52,500 motorcycles in the fourth quarter.
Share Repurchase. The Company repurchased 2.5 million shares of Harley-Davidson, Inc. common stock at a cost of $90.8 million during the third quarter of 2011. At the end of the third quarter, there were approximately 232 million shares of Harley-Davidson common stock outstanding and 22.4 million shares remaining on board-approved share repurchase authorizations.
Shareholders pleased. Harley fans?
Results are excellent and nobody commenting to congratulate Harley?
The investors sure don’t like Harley’s numbers this morning. The stock is down 3.20 @ 34.00/share. The tough times are far from over.
im only stating the obvious , but Harley-Davidsons actions in customer service and being only in it for the buck speaks higher than anything else. if the antiquated design that is the V-twin did not have such an allure to those who “always wanted a harley” the MoCo would not be in business…. this goes for the company as a whole, from the salespeople all the way up to im sure good ol willie. they know that the public wants there motorcycles… and that they dont have to do sh*t cuase you’ll take there abuse. sorry , had to rant…..
The earnings miss and gloomy outlook from Harley-Davidson (HOG -7.6%) may be spilling over to taint shares of Polaris.
Sales increased 13 percent to $1.23 billion, [ short of the $1.28 billion average of 13 analysts’ estimates ] hence the sharp drop in Hog stock today. When it normally should rise upon HOG report if outlook is good.
Reapeating what I have read today.
I’ll congratulate them. They made the right business moves during weak economic times. They have kept the company afloat and even made positive progress in sales and profit. Their sales will continue to grow as the economy improves. Continual improvement such as the 103″ engine, new models and an agressive approach to selling not only a great mororcycles but great add on assessories and an ever evolving motor-cloths line. They understand their customer base and give them what they want.
Accounting profits. HD still has a lot of issues, most notably HD finance. Margins on bikes are dropping (if you can believe that!). Market up 1% today, but HD stock is down 8% today. Investors not happy. In short, HD needs more volume sales.
The earnings miss and gloomy outlook from Harley-Davidson (HOG -7.6%) may be spilling over to taint shares of Polaris.
Sales increased 13 percent to $1.23 billion, [ short of the $1.28 billion average ] of 13 analysts’ estimates ] hence the sharp drop in Hog stock today. In other words the company is not performing as expected.
This is what I read today from the reports.
My Polaris stock split recently …. I am a happy camper!
Over & Out,
Jeff
Jeff .
Good point I forgot about the split. “It’s been a pretty darn good year for Polaris.
If it be known, I think the Hog father probably owns PII stock. ” LOL “
Toby hit the nail on the head. I did a bit more DD after I posted this morning and the consensus was that Thin margins were the excuse for the drop in pps. The finance arm is weak and I think it will always need to be subsidized by the stronger sectors of the MoCo. Polaris had faster growth this quarter, so I think there must be some concern within HOG over Polaris’ growing market share. Of course we could just blame it on Harley’s black eye for supporting the Hoky Hey Challenge. ;-}
Bought stock when it first came available $11 a share split 5 times has worked out for me. Had a 1979 superglide in the beginning, bought a 1997 heritage springer and sold my glide for double what I paid for it, times have changed would be lucky to get half of what I paid for my springer- will be keeping it
I know this news will make the haters of all things HD real sad. And I am sure that all the neuvo accountants that blog here will explain how this really is,nt good news and that HD is just juggling the numbers. Some will never be happy until Harley goes belly up so they can say we told you so.
I cheer them HD ,just as I would Victory , Honda, Yamaha and yes even Suzuki , because these companies represent thousands of dealerships, part vendors and support industries that depend on the vitality of the manufacturers. You don’t have to like the bike or even the corp to understnd the symbiotics of the industry. Harley is not the evil empire.