(Recasts lead, adds details of results, context, share price)
By Nick Carey
CHICAGO Jan 28 U.S. motorcycle maker
Harley-Davidson Inc reported a higher-than-expected
quarterly profit on Monday despite a dip in global sales and
said it would ship more vehicles during 2016, sending its stock
up nearly 10 percent in early trading.
„Although we expect the macroeconomic environment to remain
challenging, we are confident we’ll continue to lead with our
powerful brand,“ Chief Executive Matt Levatich said in a
Harley-Davidson, which commands more than half the U.S.
big-bike market, has seen its share eroded in recent years as
foreign competitors cut prices to entice new buyers and due to
anemic demand for its motorcycles.
When it reported third-quarter earnings in October, the
Milwaukee-based company, which has been manufacturing
motorcycles for over a century, announced a marketing campaign
to increase brand awareness in the face of steep discounts from
foreign rivals taking advantage of a strong U.S. dollar.
Harley-Davidson said worldwide retail sales slipped 0.6
percent to 46,857 units, while it fell 3.4 percent to 26,044
units in the United States during the fourth quarter ended Dec.
31. Despite the drop, the company’s U.S. market share ticked up
slightly to 58.4 percent.
The iconic motorcycle maker has been trying to branch out
beyond its aging Baby Boomer base and to entice younger riders
with lighter models. The company said Thursday there was strong
demand for its newer models.
Executives said on a conference call with analysts that
seven out of 10 buyers of its smaller Street model were new to
Harley-Davidson said it expects to ship 269,000 to 274,000
motorcycles in 2016, an increase of about 1 percent to 3 percent
from last year, and 78,000 to 83,000 motorcycles in its first
quarter, compared to 79,589 motorcycles shipped last year.
Net income fell to $42.2 million, 22 cents per share, in the
fourth quarter, from $74.5 million, or 35 cents per share, a
Revenue slipped 2.3 percent to $1.01 billion.
Analysts, on average, had expected earnings of 19 cents per
share on revenue of $1.03 billion, according to Thomson Reuters
Up to Wednesday’s close of $37.49, shares had fallen 17.3
percent this year. In morning trading on Thursday, Harley shares
were up 8.7 percent at $40.76 after earlier surging nearly 10
(Additional reporting by Arunima Banerjee in Bengaluru; Editing
by Bernadette Baum)