H-D takes third-quarter hit

Declines correspond with reduced shipments

story by Motorcycle.Com Staff, Created Monday, Oct 22, 2007
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Harley-Davidson Inc., of Milwaukee, Wis., says its third quarter revenue has dropped 5.8% this year. Net income is down more than 15%.

Revenue for the third quarter, which ended Sept. 30, 2007, totaled US$1.54 billion compared to US$1.64 billion in 2006. Net income over that same period dropped 15.3% to US$265 million in 2007 from US$312.7 million in 2006.

“Harley-Davidson’s third quarter financial results are disappointing but not unexpected,” says CEO Jim Ziemer. “In early September, we announced that we would reduce planned motorcycle shipments for the rest of 2007, and our results for the quarter are consistent with the company’s revised guidance.

“Worldwide retail sales of Harley-Davidson motorcycles during the third quarter were virtually flat with the third quarter of 2006, down 0.2 per cent. U.S. retail sales continued to be sluggish, finishing down 2.5% for the quarter, while retail sales in our international markets grew 8.8% during the period.”

A total of 86,535 Harley-Davidson motorcycles were shipped in the third quarter, down 10,511 (10.8%) over that same period in 2006.

Revenue for the first nine months of 2007 is actually up compared to 2006. Harley-Davidson had US$4.34 billion of revenue over that span this year, an increase of 1 per cent.

Through the first nine months of the year, Harley-Davidson sold 249,413 motorcycles, down 2.7% from 2006.

Management expects to sell between 328,000 to 332,000 units in 2007, down from 349,196 in 2006. The company anticipates the U.S. retail motorcycle market will continue to be challenging in 2008.

“For the longer term, I am optimistic and confident about our future,” says Ziemer. “Harley-Davidson has a strong business model, and we will continue to manage the company in a manner that strengthens our brand and contributes to lasting success for all of our stakeholders.”

“Ongoing economic uncertainty has significantly affected the retail environment in our industry, as well as others, and we expect a challenging retail environment for the balance of 2007 and 2008,” HD spokesman Bob Klein told Motorcycle.com recently. “Retail sales drive Harley-Davidson wholesale shipments, and when demand is closer to supply, we believe our business is more subject to economic forces than it has been in the past.

“The fundamentals of Harley-Davidson’s business are strong and the company expects to be profitable in 2007 and 2008.”

Related Reading:

Harley’s Reduced’07 Shipments Cause For Alarm?

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