Earnings Preview: Harley-Davidson

From AP:

EXPECTATIONS: The motorcycle maker has predicted year-end earnings will rise between 10 percent and 13 percent. Analysts surveyed by Thomson Financial, on average, are looking for 2005 profit of $3.38 per share — a growth of about 13 percent. For the fourth quarter, analysts expect earnings of 81 cents per share on sales of $1.35 billion.
ANALYST TAKE: “Although we believe retail sales to moderate, which is reflected in our lowered wholesale sales outlook, we think the company could earn above consensus given its ability to buy back shares,” Citigroup analyst Gregory Badishkanian wrote in a recent research report. He predicted retail sales growth of 3 percent in the fourth quarter, the low of end of Street expectations for 3 percent to 5 percent growth.
“Checks suggest retail sales in October were strong but borrowed heavily from November,” and were balanced by a “flattish” December, Credit Suisse’s Scott Barry wrote in a note to clients. He expects fourth quarter earnings of 82 cents per share.
QUARTER DEVELOPMENTS: The Milwaukee-based company recalled more than 500 motorcycles in Japan in December, citing transmission problems. Harley also recalled about 13,400 of its Dyna series motorcycles because of a transmission defect.
In October, Harley said it expects to ship 348,000 to 352,000 of its namesake motorcycles in 2006 and predicted earnings growth of 11 percent to 17 percent.
COMPETITORS: Germany’s Bayerische Motoren Werke AG, or BMW, said earlier this month it sold 97,500 motorcycles in 2005, a 5.6 percent increase over 2004.
STOCK PERFORMANCE: Harley shares fell 14 percent in 2005, ending the year at $51.49 on the New York Stock Exchange.

Posted by on January 19th, 2006 at 6:17 am


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