| Author | Message | ||
     Ulykan |
Buell numbers are up but Harley numbers are down. Maybe Erik could teach HD something? Harley-Davidson Q4 Profit drops 58%; plans lower shipments in FY09; to cut 1,100 jobs - Update Fri. January 23, 2009; Posted: 08:39 AM Stocks RSS Spring Trading with Larry Connors (RTTNews) - Motorcycle manufacturer Harley-Davidson, Inc. (HOG | Quote | Chart | News | PowerRating) announced Friday morning that profit for the fourth quarter more than halved from last year, hurt by poor domestic sales amid challenging economic conditions, lower margins and 6.8% revenue decline. The performance of the company's financing segment also pulled down the results. Earnings per share for the quarter dropped 56.4% and significantly missed analysts' expectations, while quarterly revenues missed consensus estimate by a tad. Further, the company said it plans lower motorcycle shipments in 2009 and said it would cut about 1,100 salaried positions in the next two years in order to address the current economic environment. Harley-Davidson, which introduced the first V-twin powered motorcycle, sold half of the produced motor cycles to U.S. in World War I. By 1920, the company became the largest motorcycle manufacturer in the world. The Japanese motorcycle industry was founded as a result of Harley-Davidson licensing blueprints, tools, dies and machinery to the Sankyo of Japan. In a statement, chief executive officer, Jim Ziemer said, "We have a strong core business anchored by a uniquely powerful brand, but we are certainly not immune to the current economic conditions. We have a clear strategy to not only deal with the economic conditions, but also strengthen our long-term operations and financial results. We are executing that strategy with confidence and conviction." Fourth Quarter Results The Milwaukee, Wisconsin-based maker of heavyweight and sport motorcycles as well as accessories said net income was $77.81 million for the fourth quarter, down 58.2% from $186.08 million in the prior-year quarter, while earnings per share dropped 56.4% to $0.34 from $0.78 in the year-ago quarter. On average, seventeen analysts polled by First Call/Thomson Financial expected earnings of $0.57 per share in the fourth quarter. Analysts' estimates typically exclude special items. Revenues for the quarter declined 6.8% to $1.29 billion from $1.39 billion in the same quarter last year, and marginally missed fifteen Wall Street analysts' consensus estimate of $1.30 billion. Segment Details Under the motorcycles and related products, revenues from Harley-Davidson motorcycles was $1.02 billion, 8.5% lower than $1.12 billion in the year-ago quarter. Shipments of Harley-Davidson motorcycles totaled 76,581 units in the fourth quarter, a decrease of 4,625 units or 5.7% from 81,206 units last year. Domestic shipments marginally declined to 57,081 units from 59,092 units in the prior-year quarter, and exports fell to 19,500 units from 22,114 units in the same quarter of last year. Buell motorcycles posted revenues of $33.38, higher than $27.74 million in the same quarter last year, while Buell shipments for the quarter rose to 3,895 units from 3,137 units in the year-ago quarter. Parts and accessories revenues totaled $152.11 million, 7.9% lower than $165.19 million in the prior-year quarter, while revenues for general merchandise declined 6% to $69.01 million from $73.42 million in the comparable quarter last year. Worldwide retail sales of Harley-Davidson motorcycles decreased 13.1% year-over-year, with a 19.6% fall in U.S. retail sales. The heavyweight motorcycle market in the U.S. dropped 25.5%. In the international markets, the retail sales of Harley-Davidson motorcycles grew a tad by 0.7%, with Canadian sales edging up 1.4% and European sales rising 3.4%. While Asia Pacific region posted a 8.9% downside in retail sales, the Latin America Region recorded a 28% growth. Under the Financial Services segment, Harley-Davidson Financial Services or HDFS, reported fourth-quarter operating loss of $24.9 million, compared to operating income of $38.6 million in the year-ago quarter, mainly due to a $35.1 million write-down of retained securitization interests and a $28.4 million write-down to fair value of finance receivables held for sale. Other Metrics Income from operations for the fourth quarter dropped to $124.11 million from $285.66 million in the year-ago quarter, while total operating expenses was $254.10 million, up from $243.95 million in the prior-year quarter. Gross profit for the quarter declined to $408.69 million from $494.53 million in the comparable quarter a year ago, while gross margins declined to 31.6% from the year-ago quarter's 35.7%. Margins fell primarily due to unfavorable shipment mix, higher product costs and the cost involved in the Sportster motorcycle trade-up promotion. The company ended the fourth quarter with cash and cash equivalents of $593.56 million, compared to $402.85 million at end of the prior-year quarter. During the fourth quarter, Harley-Davidson did not repurchase shares. As of the end of the fourth quarter, there were 16.7 million shares remaining on a board-approved share repurchase authorization. In order to combat the recession and worldwide slowdown in consumer demand, Harley-Davidson is executing a three-part strategy, intending to strength its operations and financial results. The company would focus on three critical areas like investing in the Harley-Davidson brand, realigning cost-structure, and obtaining funds for its financial arm, HDFS, so that Harley-Davidson could provide dealers and retail customers funding to sell and buy motorcycles respectively. Additionally, as a part of the planned volume reduction and restructuring actions, the company intends about 1,100 jobs cuts over the next two years, with 70% of the workforce reduction expected to occur in 2009. The total job cuts reflect 12% of the company's workforce. The company expects incur charges of $110 million to $140 million over 2009 and 2010 related to the job cuts. Further, it expects to record annual savings between $60 million and $70 million through cuts. Last month, Harley-Davidson announced that CEO Ziemer intends to retire to the Board of Directors. Ziemer, having served the company for 40 years, will continue to remain in his current role until a new chief executive officer takes charge. Ziemer joined the company in 1969 as a freight elevator operator while attending the University of Wisconsin-Milwaukee or UWM. Ziemer was named the company's chief financial officer in 1990 and later on in 2005, Ziemer became President and chief executive officer. Fiscal 2008 Highlights For the full-year, Harley-Davidson reported a net income of $654.72 million or $2.79 per share, down from $933.84 million or $3.74 per share posted last year. Wall Street analysts projected earnings of $3.02 per share in the year 2007. The company's annual revenues declined 2.3% to $5.59 billion from $5.73 billion in fiscal 2007, and came in below analysts' expectations of $5.61 billion. Outlook "We reduced our production levels prudently in 2008, helping our dealers achieve lower inventory levels and we're going to show similar discipline in 2009. That's not only critical for the health of our business, but for our dealers' businesses, as well." Ziemer added. The company has refrained from providing earnings guidance for 2009, citing the volatility of the current economic environment. For the first quarter of fiscal 2009, Harley-Davidson expects new motorcycle shipments to increase in a range of 3% to 8.5% or between 74,000 and 78,000 units. For fiscal 2009, the company anticipates new motorcycle shipment reduction in a range of 10% to 13% or between 264,000 and 273,000 units. . The company also expects gross margins for the full-year to be between 30.5% and 31.5%. Stock Quote HOG closed Thursday's regular trading session at $12.40, down $0.86 on a volume of 8.48 million shares, higher than the three-month average volume of 5.18 million shares. In the past 52-week period, the stock has been trading in a range of $11.54 to $48.05. For comments and feedback: contact editorial@rttnews.com Copyright(c) 2009 RealTimeTraders.com, Inc. All Rights Reserved For full details on Harley-Davidson Inc (HOG) click here. Harley-Davidson Inc (HOG) has Short Term PowerRatings of 5. Details on Harley-Davidson Inc (HOG) Short Term PowerRatings is available at This Link. Free Trading Education with Larry Connors | ||
| Arcticktm |
Did the line about HD making the worlds first v-twin motorcycle come from HD press release?? I sure hope not. I am pretty sure that Indian (George Hendee) was first with a v-twin in 1903. My recollection on history was that HD did not come out with a v-twin for sale until 1909. | ||
| Johnboy777 |
So then, now's a good time to buy HD stock. . | ||
| Hmartin |
No kidding, though. HOG stock hasn't been this low in 10 years, and motorcycles are no less popular today than yesterday. Once people get some cash back in their pockets, we could see $70 again. Disclaimer - I am no stock advisor. Just about any blue chip looks good these days. | ||
| Hmartin |
Following up, I'm putting my money where my mouth is. I just placed a limit order for 100 shares at 10-1/2 AON. Maybe that's a little pessimistic, but we'll see what happens. | ||
| Conchop |
We are not near the bottom yet. Either I'm right, or, you buyers are right. | ||
| Ulykan |
I don't know if anyone noticed but Buell sales were UP for the same period. That's why I said maybe Erik could teach HD something. (tongue in cheek of course) | ||
| Court |
>>>>Maybe Erik could teach HD something? Don't get me started. | ||
| Court |
>>>We are not near the bottom yet. I agree. 5 quarters to go and it'll get worse for the next 3 of 4. Wild guess. | ||
| Conchop |
People need good jobs which come from good businesses which come from good quality products and services. Which came first - the chicken or the egg? Buying cheap Chinese landfill bait from Wal Mart and that cheap ass attitude that goes with it has affirmed the Wall Street assumption that it is OK to ship out our good jobs to slave labor markets in Asia. Seems to me that if a person found good American made products and services that was backed by bona fide quality management systems in place, it would be worth every extra penny you spent for it. That would allow a better chance for that penny to come back to you. Don't get me wrong, imports are OK. But when American names are "LABELED" and made offshore, chances are you will not see any real value as their sub standard qualities will have you throwing your cheap ass Chinese made Harley Davidson trinkets, jackets, and such products in the trash. | ||
| Johnboy777 |
We live in a 'world' economy ... it will never go back to the way it was. Accept it and move on... I mean, really. Wait 'til China and India come on line... there's billions of people out there racing toward a middle-class lifestyle, as they consume the world's natural resources. In the greater world-view, America isn't the only one exercising its 'manifest destiny'- just the only one with which most of us are familiar. . | ||
| Tootal |
I'm with conchop on this one. Things were going well until NAFTA was signed. Then there was that great sucking sound as Ross Perot put it. I'm sure he's somewhere saying; "I told you so."  | ||
| Johnboy777 |
NAFTA simply paints a face on what is happening, and will, no doubt, continue to happen in this country. Which is the realization that we are a part of a world economy, like it, or not, that is changing the way we do, and have done business. It’s true, jobs are moving overseas – but that’s been the case for many years now, as foreign countries go through the equivalent of their own industrial revolution. NAFTA is a moot point (long term) with regard to our place within the world economy. We can’t bury our heads in the sand and proclaim that we should all buy ‘American’ …that’s just no longer possible. Isolationism isn’t an answer; we ‘must’ compete within that larger world economy of which we are a part, as we move forward as a nation. The question is how? No use trying to stave off the inevitable. This discussion is rather like two farmers 100+ years ago arguing about horseless carriages, and how noisy, smelly and problematic they are, and that they will never replace horses – passionately arguing, mainly because they don’t want to see any changes to the way things are. Wanting to protect their worldview. The paradigm is shifting right out from under us, as it has countless times, for countless cultures, at specific points throughout history.... yeah, it's a bitch!  . | ||
| Conchop |
Fair trade and responsible human/labor rights is where it's at. Polluters want to go unchecked. Slave shops with open sewers is hardly NAFTA. The fact of the matter is the simple observation of the playing field. It is certainly not level. We Americans have advanced the concept of business. Greed has allowed the average American to be suckered. Right is right and wrong is wrong. Try selling your American made product to China or Japan. Chances are, that dog won't hunt. They realize that the real way to national wealth is a positive trade balance They practice a high degree of protectionism. We Americans are the ones who are stiffed with the all the right wing Wall Street crap about free trade and how protectionism is bad for the USA. Truth is, we as a nation made our bed by believing what the right wing business elite has said and what they have said has not been well managed or completely truthful. We have all failed at a reasonable social contract. We now sleep in that bed. All I'm saying is one hand feeds another. Taking out so many of those hands means HD stock, business, and employment goes down, as does everyone else. Yes, we have to compete with the world. A level playing field would help. If it isn't level, then I'll take my money to businesses which I deem worthy. Those who have moved profitable USA jobs to more profitable slave markets will be shunned. | ||
| Tootal |
My point was that NAFTA was just the beginning. I believe in free trade as long as it's fair trade and your right, we are getting the shaft. The theory is that a country would get industrialized and then their people would buy our products and we would buy theirs, the problem is these third world countries do not pay anything near enough for any of their people to buy anything so big business gets cheap labor and we lose more manufacturing jobs. Isolationism isn't the answer but free/unfair trade isn't either. | ||
| Conchop |
Bingo! |
