Earnings Preview: Harley-Davidson

Harley-Davidson (HOG) is expected to report Q2 earnings before market open on Thursday, July 17, with a conference call scheduled for 9:00 am ET.

Guidance

Analysts are looking for a profit of 76c on revenue of $1.42B. The consensus range is 62c to 87c for EPS, and revenue of $1.34B to $1.52B, according to First Call. In April, Harley-Davidson forecast FY08 EPS $3.00 to $3.18 vs. First Call consensus of $3.05. The company sees charges of $20M to $25M from workforce reductions in 2008 and plans to ship fewer motorcycles in 2008 than 2007.

Analyst Views

On July 11, Harley-Davidson announced an agreement to acquire MV Agusta Group for approximately $109M. While the transaction is not expected to impact earnings for several years, Baird believes this does provide Harley with a premium sport bike brand as well as highlighting their under-appreciated European opportunities. Additionally, the firm expects the company to maintain production and EPS guidance when reporting Q2 results.

Between the faltering economy, soaring food and gas prices, limited credit, slumping home prices and worries about jobs, shoppers remain unnerved and have cut back spending on discretionary items. Though Harley's products are "twice as efficient as sedans and light trucks," that does not insulate Harley from the economic downturn. UBS estimates that Harley's Q2 will come in at 75c per share and that longer-term, the recover in the motorcycle maker's operations "could face a stretch of rough road". 

Comments

[mallarde:]

UBS estimates that Harley's Q2 will come in at 75c per share and that longer-term, the recover in the motorcycle maker's operations "could face a stretch of rough road".

The end of the article is the most pertinent.

2008 Jul 16 03:56 PM