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Harley-Davidson reports Q1 2010 results

HDFS back in the black

By Motorcycle.com Staff, Apr. 20, 2010
Harley-Davidson reported $33.3 million in profit in the first-quarter of 2010, a 72% decline from the same period in 2009. The Motor Company’s first-quarter report did show some positive signs, however as its financial services arm returned to profitability.

Worldwide sales were down 18.2% over the quarter compared to the same period in 2009, but that marked an improvement over the previous two quarters that each saw a decline of over 20%. Domestic sales were down 24.3% while international retail sales were down only 2.8% compared to double-digit decreases in preceding quarters. Harley-Davidson motorcycle sales were up in Europe and Canada but down in Asia and Latin America.

“We are encouraged by our progress in the first quarter,” says Keith Wandell, president and chief executive officer of Harley-Davidson, Inc. “We are seeing directional improvement in our dealers’ retail motorcycle sales as we enter the key selling season. At the same time, given the global economic uncertainty that still exists, we believe conditions will remain challenging throughout this year, and we will continue to factor that into how we manage the business.”

Sales revenue from motorcycles in the first quarter of 2010 totaled $808.8 million, a 20% decrease from the previous year. Harley-Davidson shipped 53,674 motorcycles during the quarter, down 28% from the 74,670 units shipped in the first quarter of 2009. Harley-Davidson expects to ship between 55,000 and 60,000 units over the next quarter.

On a positive note, Harley-Davidson Financial Services reported an income of $26.7 million in the first quarter of 2009, returning the company’s financial arm to profitability after three quarters of losses. Improved credit
The Motor Company’s restructuring process is also proceeding as planned. Harley-Davidson is expecting one-time charges between $175 million to $195 million in 2010.

On the MV Agusta front, Harley-Davidson says it is in discussions with potential buyers. The Italian brand is listed in the books as “discontinued operations”, accounting for a loss of $35.4 million over the first quarter of 2010.

Harley-Davidson is still selling off its remaining Buell inventory, shipping 1,774 units in the first quarter of 2010 compared to the 2,441 units shipped over the same period in 2009. The first quarter of 2009 was before the Motor Company decided to shut down Buell, however, and the remaining inventory is selling for much lower prices, resulting in a 43.6% drop in Buell sales revenue.