Harley-Davidson Jumps on Decent Earnings

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When Harley-Davidson Inc. (NYSE: HOG) released its third-quarter earnings report before the markets opened on Tuesday, it posted $0.64 in earnings per share (EPS) on $1.09 billion in revenue. The consensus estimates from Thomson Reuters had called for EPS of $0.64 and $1.09 billion in revenue. In the same period of last year, the company reported $0.69 in EPS and revenue of $1.14 billion.

Revenue from motorcycles and related products was down compared to the third quarter in 2015, primarily due to decreased motorcycle shipments.

In terms of guidance, Harley-Davidson continues to expect to ship 264,000 to 269,000 motorcycles in 2016, which is roughly down 1% to up 1% from 2015. In the fourth quarter of 2016, the company expects to ship 44,200 to 49,200 motorcycles, compared to 48,149 motorcycles shipped in the year-ago period.

Harley-Davidson continues to expect full-year 2016 operating margin of about 15% to 16% for the Motorcycles segment. It expects 2016 capital expenditures of $255 million to $275 million.

Consensus estimates call for $0.30 in EPS on $944.89 million in revenue in the fourth quarter.

Matt Levatich, president and CEO of Harley-Davidson, commented:

We continue to effectively navigate a fiercely competitive environment and an ongoing weak U.S. industry. We are pleased with the positive results and the enthusiasm we’ve seen for our Model Year 2017 motorcycles, featuring the new Milwaukee-Eight engine. We are confident that the entire line-up will drive retail sales growth for the remainder of 2016 and position us well heading into the spring riding season next year.

Shares of Harley-Davidson were trading up nearly 6% at $52.64 on Tuesday, with a consensus analyst price target of $52.47 and a 52-week trading range of $36.36 to $57.33.