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Harley-Davidson, Inc. (HOG - Free Report) reported adjusted earnings of $1.03 per share in first-quarter 2018, beating the Zacks Consensus Estimate of 89 cents. Adjusted earnings in the year-ago quarter were $1.05.
Net income decreased to $174.8 million from $186.4 million registered a year ago.
Motorcycle and related products revenues rose to $1.36 billion in the reported quarter compared with $1.33 billion in the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.26 billion. The company also logged consolidated revenues of $1.54 billion, improving from the prior-year figure of $1.5 billion.
Harley-Davidson, Inc. Price, Consensus and EPS Surprise
Operating income declined to $236 million from $289 million in the year-ago period.
Motorcycles and Related Products
Operating income from Motorcycles and Related Products declined to $172.8 million from $236.5 million recorded a year ago.
The company shipped 63,944 motorcycles during the quarter under review compared with 70,831 shipments in first-quarter 2017.
Harley-Davidson’s retail motorcycle sales in the United States declined 12% to 29,309 units. International sales gained 0.2% to 21,777 motorcycles from 21,733 in the prior-year quarter. During the quarter, Latin America and the Middle East and Africa (EMEA) region sales gained 7% and 6.8%, respectively, while Canada and Asia-Pacific region’s sales reduced 11.9% and 7.8%, respectively.
Harley-Davidson’s worldwide retail motorcycle sales fell 7.2% to 51,086 units from 55,049 motorcycles in the year-ago quarter.
Revenues from Parts and Accessories gained 0.6% to $169 million. Similarly, the metric for General Merchandise — including MotorClothes apparel and accessories — rose 1.4% to $56.6 million.
Harley-Davidson Financial Services (HDFS)
Revenues in the Financial Services segment rose 2.9% to $178 million in first-quarter 2018. Operating income improved 20.8% to $63.6 million from the year-ago figure of $52.6 million.
Financial Position
Harley-Davidson had cash and cash equivalents of $753.5 million as of Apr 1, 2018, compared with $839.7 million as of Mar 26, 2017. Long-term debt was lowered to $4.1 billion from $5.3 billion as of Mar 26, 2017.
For the fiscal year ending Dec 31, 2017, Harley-Davidson’s operating cash inflow rose to $192 million from $160 million a year-ago. Capital expenditures increased to $28.4 million from $24 million in the preceding year period.
Share Repurchase
During first-quarter 2018, the company repurchased 1.4 million of common shares for $65.1 million. At the quarter-end, 24.2 million shares remained on board-approved share repurchase authorizations.
Looking Forward
For 2018, Harley-Davidson reaffirmed its full-year motorcycle shipments to be 231,000-236,000 units. Also, for second-quarter 2018, it expects motorcycle shipments to be approximately 67,500-72,500 units.
Moreover, for 2018, the company anticipates capital expenditures of $250-$270 million. Further, the operating margin is estimated at nearly 9.5-10.5%.
Honda has expected long-term growth rate of 4.8%. Over a year, shares of the company have gained 18%.
Dana has expected long-term growth rate of 10%. Shares of the company have risen 32.9% in the past year.
BorgWarner has expected long-term growth rate of 8.6%. Over a year, shares of the company have gained 29.9%.
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Harley-Davidson (HOG) Q1 Earnings Beat Estimates, Falls Y/Y
Harley-Davidson, Inc. (HOG - Free Report) reported adjusted earnings of $1.03 per share in first-quarter 2018, beating the Zacks Consensus Estimate of 89 cents. Adjusted earnings in the year-ago quarter were $1.05.
Net income decreased to $174.8 million from $186.4 million registered a year ago.
Motorcycle and related products revenues rose to $1.36 billion in the reported quarter compared with $1.33 billion in the prior-year quarter. The figure surpassed the Zacks Consensus Estimate of $1.26 billion. The company also logged consolidated revenues of $1.54 billion, improving from the prior-year figure of $1.5 billion.
Harley-Davidson, Inc. Price, Consensus and EPS Surprise
Harley-Davidson, Inc. Price, Consensus and EPS Surprise | Harley-Davidson, Inc. Quote
Operating income declined to $236 million from $289 million in the year-ago period.
Motorcycles and Related Products
Operating income from Motorcycles and Related Products declined to $172.8 million from $236.5 million recorded a year ago.
The company shipped 63,944 motorcycles during the quarter under review compared with 70,831 shipments in first-quarter 2017.
Harley-Davidson’s retail motorcycle sales in the United States declined 12% to 29,309 units. International sales gained 0.2% to 21,777 motorcycles from 21,733 in the prior-year quarter. During the quarter, Latin America and the Middle East and Africa (EMEA) region sales gained 7% and 6.8%, respectively, while Canada and Asia-Pacific region’s sales reduced 11.9% and 7.8%, respectively.
Harley-Davidson’s worldwide retail motorcycle sales fell 7.2% to 51,086 units from 55,049 motorcycles in the year-ago quarter.
Revenues from Parts and Accessories gained 0.6% to $169 million. Similarly, the metric for General Merchandise — including MotorClothes apparel and accessories — rose 1.4% to $56.6 million.
Harley-Davidson Financial Services (HDFS)
Revenues in the Financial Services segment rose 2.9% to $178 million in first-quarter 2018. Operating income improved 20.8% to $63.6 million from the year-ago figure of $52.6 million.
Financial Position
Harley-Davidson had cash and cash equivalents of $753.5 million as of Apr 1, 2018, compared with $839.7 million as of Mar 26, 2017. Long-term debt was lowered to $4.1 billion from $5.3 billion as of Mar 26, 2017.
For the fiscal year ending Dec 31, 2017, Harley-Davidson’s operating cash inflow rose to $192 million from $160 million a year-ago. Capital expenditures increased to $28.4 million from $24 million in the preceding year period.
Share Repurchase
During first-quarter 2018, the company repurchased 1.4 million of common shares for $65.1 million. At the quarter-end, 24.2 million shares remained on board-approved share repurchase authorizations.
Looking Forward
For 2018, Harley-Davidson reaffirmed its full-year motorcycle shipments to be 231,000-236,000 units. Also, for second-quarter 2018, it expects motorcycle shipments to be approximately 67,500-72,500 units.
Moreover, for 2018, the company anticipates capital expenditures of $250-$270 million. Further, the operating margin is estimated at nearly 9.5-10.5%.
Zacks Rank & Key Picks
Harley-Davidson carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Honda Motor Co., Ltd. (HMC - Free Report) , Dana Incorporated (DAN - Free Report) and BorgWarner Inc. (BWA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Honda has expected long-term growth rate of 4.8%. Over a year, shares of the company have gained 18%.
Dana has expected long-term growth rate of 10%. Shares of the company have risen 32.9% in the past year.
BorgWarner has expected long-term growth rate of 8.6%. Over a year, shares of the company have gained 29.9%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
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