Harley-Davidson Blasts Earnings Forecasts, Boosts 2021 Guidance

Harley-Davidson said it sees motorcycle segment revenues rising between 30% and 35% this year, a big increase from its February forecast.
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Harley-Davidson  (HOG) - Get Report posted much stronger-than-expected first quarter earnings Monday, and lifted its full-year sales guidance, sending shares sharply higher in pre-market trading.

Harley-Davidson said adjusted earnings for the three months ending in March were pegged at $1.68 per share, nearly triple last year's figure of 45 cents per share and well ahead of the Street consensus forecast of 88 cents. Group revenues, Harley-Davidson said, rose 10% to $1.423 billion, again topping analysts' estimates of a $1.248 billion tally.

Looking into the current financial year, Harley-Davidson said it sees revenues from its motorcycles segment rising between 30% and 35% from 2020 levels, a big increase from the 20% to 25% range it published in February, with an operating income margin of between 7% and 9%. Capital expenditures for the year should come in between $190 million and $220 million, the company said.

“I am very pleased with the pace of recovery that we have seen across our business, as demonstrated by the strong financial results this quarter," said CEO Jochen Zeitz. "The actions we have taken to reshape the business are having a positive impact on our results, especially for our most important North American region.” 

“We can see the initial signs of consumer excitement and optimism returning and I am confident Harley-Davidson in 2021 is a significantly leaner, faster, and more efficient organization which is ready to win and successfully deliver on our 5-year Hardwire strategy, as the most desirable motorcycle brand in the world," he added.

Harley-Davidson shares were marked 13.5% higher in early trading immediately following the earnings release to change hands at $46.00 each, extending their six-month gain to around 60%.

The group also noted that, as part of a broader trade dispute between the U.S. and the European Union, all of its products -- regardless of origin -- will be subject to a 56% import tariff when entering the EU from June of this year.

"This is an unprecedented situation and underscores the very real harm of an escalating trade war to our stakeholders on both sides of the Atlantic," said CEO Zeitz. "The potential impact of this decision on our manufacturing, operations and overall ability to compete in Europe is significant."

"Imposing an import tariff on all Harley-Davidson motorcycles goes against all notions of free trade and, if implemented, these increased tariffs will pose a targeted competitive disadvantage for our products, against those of our European competitors," he added.