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Posts Tagged ‘Operating Income’

It’s not a good day to be a Harley-Davidson (NYSE: HOG) dealer.  The company reported that Q3 profits fell sharply and they tried to reassure investors that company management is taking prudent steps to manage the brand.  They also cut earnings outlook and lowered the estimate for motorcycle shipments for the rest of the year.

Harley reported that earnings for Q3 dropped 37% to $166.5M from $265M as compared to Q3 of 2007.  This is the fifth straight decline in quarterly earnings for Harley.  Revenue fell 8% to $1.42B from 1.54B in 2007.  Shipments of motorcycles fell 14% to 75,704 although they did report that international shipments were slightly up.  Dealer retail sales fell 10% this quarter as purchases of high-end motorcycles are often tied to consumer confidence and the credit market squeeze has compounded the problems.

Speaking of credit, the Financial Services segment of the company reported higher delinquency rates this quarter, a 28% decline in operating income and having to raise interest rates for all potential customers.

In a downturn climate Harley acquired MV Augsta Group, expanded on European operations, opened the new museum, rolled out MySpace and Facebook sites and hosted the 105th celebration all during this quarter.  So, given the daily doses of financial doom and credit circumstances Harley seems to be doing “okay” in trying to weather this slowdown.

Call transcript is HERE.

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