WASHINGTON (dpa-AFX) - Motorcycle manufacturer Harley-Davidson, Inc. (HOG) on Tuesday reported a 30 percent increase in profit for the second quarter from last year on double-digit growth in revenues, reflecting higher motorcycle shipments to dealers and distributors worldwide.
Earnings per share for the quarter beat analysts' expectations, while revenues slightly missed their expectations. Looking ahead, the company lowered its shipment forecast for fiscal 2014, citing weaker than expected U.S. retail sales in the second quarter.
Keith Wandell, Chairman, President and Chief Executive Officer of Harley-Davidson said, 'U.S. retail Harley-Davidson sales fell short of our expectations in the second quarter. Because we are committed to managing supply in line with demand, we are reducing our full-year shipment plan and now expect shipment growth of approximately 3-1/2 to 5-1/2 percent over last year.'
The Milwaukee, Wisconsin-based maker of heavyweight and sport motorcycles as well as accessories reported net income for the second quarter of $354.15 million or $1.62 per share, up from $271.74 million or $1.21 per share in the prior-year quarter.
On average, sixteen analysts polled by Thomson Reuters expected the company to report earnings of $1.46 per share for the quarter. Analysts' estimates typically exclude special items.
Motorcycles and related products revenue for the quarter grew 12 percent to $1.83 billion from $1.63 billion in the same period last year, but slightly missed analysts' consensus estimate of $1.84 billion.
Dealers worldwide sold 90,218 new Harley-Davidson motorcycles in the second quarter, up only slightly from 90,193 motorcycles in the year-ago quarter.
Sales in the U.S. edged down less than 1 percent from the year-ago period to 58,225 units. The company noted that U.S. retail sales were adversely affected by prolonged poor weather across parts of the U.S. and soft sales of Sportster motorcycles ahead of the highly anticipated arrival of Street motorcycles in dealer showrooms.
In international markets, dealers sold 31,993 new Harley-Davidson motorcycles during the quarter, up from 31,952 motorcycles in the year-ago period.
Sales rose 7.0 percent in the EMEA Region and 1.5 percent in the Asia Pacific Region, but declined 10.4 percent in the Latin America Region and 18.0 percent in Canada.
Revenue from motorcycles for the quarter grew 16 percent to $1.48 billion, with a 9 percent increase in motorcycle shipments to dealers and distributors worldwide to 92,217 motorcycles. Motorcycle shipments in the U.S. increased 10 percent to 63,043 units.
Revenue from motorcycle parts and accessories edged up 0.7 percent from last year to $271.57 million. Revenue from general merchandise, which includes MotorClothes apparel and accessories, declined 7 percent to $76.39 million.
The company's gross margin for the quarter improved 260 basis points to 39.5 percent from last year's 36.9 percent.
Looking ahead to the third quarter, Harley-Davidson expects to ship 49,000 to 54,000 motorcycles, compared to shipments of 54,025 motorcycles in the year-ago period.
For fiscal 2014, Harley-Davidson now expects to ship 270,000 to 275,000 motorcycles to dealers and distributors worldwide, down from its earlier guidance of 279,000 to 284,000 motorcycles. The revised outlook represents an increase of about 3-1/2 percent to 5-1/2 percent increase from 2013.
Wandell said, 'We believe the underlying demand fundamentals of the business remain intact. We continue to see a strong response to the new Rushmore models as well as great interest in the Harley-Davidson Street 750 and 500, which began to hit dealer showrooms in late June.'
HOG is currently trading at $63.45, down $3.63 or 5.41 percent on a volume of 2.88 million shares.
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