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Harley-Davidson Tops Earnings Forecast, Repeats Motorcycle Revenue Forecast

"We are encouraged by the signs of consumer positivity in the market; however, we remain mindful of the significant supply chain challenges that we expect to continue to impact the sector,” said CEO Jochen Zeitz.

Harley-Davidson  (HOG) - Get Report posted stronger-than-expected second quarter earnings Wednesday, while reiterating its full-year sales forecasts even as EU tariffs look to hit the group's operating margins.

Harley-Davidson said adjusted earnings for the three months ending in June were pegged at $1.41 per share, more than double last year's figure of 60 cents per share and well ahead of the Street consensus forecast of $1.18. Group revenues, Harley-Davidson said, rose 77% to $1.532 billion, again topping analysts' estimates of a $1.415 billion tally.

Looking into the second half of the year, Harley-Davidson repeated its earlier forecast for motorcycle segment revenues to rise by between 30% and 35% from last year and nudged its capital spending estimates by $5 million to between $190 million and $225 million. 

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“I’m pleased with the pace of improvements and with the strong quarter that we have delivered,” said CEO Jochen Zeitz. “We are starting to see the initial proof points as we execute our Hardwire Strategy, as demonstrated by the positive financial results today."

"We are encouraged by the signs of consumer positivity in the market; however, we remain mindful of the significant supply chain challenges that we expect to continue to impact the sector.”

Harley-Davidson shares were marked 3.7% lower in early trading immediately following the earnings release to change hands at $42.17 each, a move that would extend the stock's year-to-date gain to around 18%. 

Zeitz had cautioned earlier this year that, owing to 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.

However, a truce arranged with Brussels in late May suspended some those tariffs for at least six months. Harley-Davidson is still subject to a 31% levy on imported bikes into its second-largest market, however, and now sees operating income growth of around 6% to 8% this year, compared to a prior forecast of between 7% and 9%.