Harley-Davidson, Inc. (HOG) is the world’s leading designer and manufacturer of heavyweight motorcycles and related products and merchandise. The company is gaining from expansion of product portfolio and high market share in the U.S motorcycle market. The company is also recording increase in shipments over time.
However, Harley-Davidson faces challenges due to product recalls, which increase its selling, general and administrative expenses. Lower consumer purchasing power in the current economic environment also adversely affects the company due to its expensive product range.
Estimate Trend & Surprise History
Investors should note that the fourth-quarter earnings estimate for Harley-Davidson has been stationary over the past week and month. The Zacks Consensus Estimate has remained static at 33 cents over these periods.
Harley-Davidson has delivered a flurry of positive earnings surprises. It has beaten the Zacks Consensus Estimate in the trailing 4 quarters with an average beat of around 10.3%. Investors have been eagerly awaiting Harley-Davidson’ latest earnings report to see whether it makes a clean sweep in 2014 with outperformance in all four quarters.
Earnings
Harley-Davidson delivered adjusted earnings of 35 cents per share, surpassing the Zacks Consensus Estimate of 33 cents. The company reported higher profitability due to strong international sales of new Harley-Davidson motorcycles and focus on expansion of customer base.
Revenues
Harley-Davidson reported revenues of $1.2 billion, up 1% year over year. Revenues surpassed the Zacks Consensus Estimate of $1.06 billion.
Key Stats/Developments to Note
In 2014, Harley-Davidson’s dealers sold 267,999 new motorcycles globally, 2.7% higher year over year. The company expects its shipment to increase 4%–6% to 282,000–287,000 motorcycles worldwide in 2015. In the first quarter, the company will ship around 79,000 to 84,000 motorcycles. Based on this, Harley-Davidson expects operating margin to be 18% to 19%.
Zacks Rank
Currently, Harley-Davidson has a Zacks Rank #3 (Hold), but that could change following its earnings report which has just released.
Market Reaction
Harley-Davidson’ shares increased 0.34% to $62.50 following the release. Clearly, the initial reaction to the release is positive. It would be interesting to see how the market reacts to the results during the trading session today.
Check back later for our full write up on Harley-Davidson’ earnings report!
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