Harley-Davidson's 1Q profits fell 18% due to a three-week strike at its biggest production facility, but still managed to beat the Street's estimates, sending shares higher by more than 3%. EPS came in at $0.74, $0.02 better than consensus estimates, which had factored in the strike as well as sagging U.S. motorbike sales. Revenue for the quarter also topped estimates, coming in at $1.18 billion, versus expectations of $1.1 billion in sales. Despite revenue falling 8.3% due to the strike, CEO Jim Ziemer said the company expected to return to a revenue growth rate range of 11%-17% in 2008 and 2009. Sticking with its forward outlook, Ziemer added that in 2007, Harley-Davidson "expects EPS growth in the range of 4% to 6% compared to 2006 based on moderate revenue growth, lower operating margin, and the benefits of our strong free cash flow."
Sources: Press Release, Reuters, AP, MarketWatch,
Commentary: Disturbing Trends at Harley-Davidson: Why It's Time to Sell • How Harley Could Kick Back Into Gear • Cramer's Take on HOG
Stocks/ETFs to watch: Harley-Davidson, Inc. (HOG). Competitors: Polaris Industries Inc. (PII)
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