is feeling the pinch of the strapped U.S. biker as the company sees 2008 earnings per share falling between 15% to 20% on declining sales.
The Milwaukee chopper maker, which saw a double-digit decline in motorcyle retail sales in the first quarter, will also cut more than 700 jobs as demand falls. Harley recorded a 2.5% drop in profit in the first quarter and cut earnings guidance for the year from $3.18 to $3 a share.
First-quarter EPS was 79 cents, an increase of 6.8%. Net income was $187.6 million compared to $192.3 million a year ago, a decrease of 2.5%. Revenue for the quarter was $1.31 billion vs. $1.18 billion a year ago.
"In view of U.S. retail trends and uncertainty about the future of the economy, we now plan to ship 23,000 to 27,000 fewer Harley-Davidson motorcycles in 2008 than we shipped in 2007, resulting in total planned 2008 shipments between 303,500 and 307,500 units," CEO Jim Ziemer said. Harley expects to ship between 76,000 and 80,000 motorcycles in the second quarter.
"We will achieve the shipment reduction through temporary plant shutdowns and adjustments to daily production rates," he said. "This will result in a decrease of about 370 unionized employees over the next several months. The company will also be reducing the nonproduction workforce by about 360 jobs."
Share of HOG were recently trading down 71 cents, or 1.9%, to $36.06 in