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Revenue Drops at Harley

Earnings are also lower.
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Harley-Davidson

(HOG) - Get Harley-Davidson, Inc. Report

said its fourth-quarter earnings and revenue declined year over year as the domestic economy slowed in the second half of 2007.

Revenue for the quarter was $1.39 billion, down 7.7% from $1.50 billion in the year-ago quarter. Earnings fell to $186.1 million, or 78 cents a share, from $252.4 million and 97 cents a share last year.

Analysts surveyed by Thomson Financial were looking for a profit of 82 cents and top line of $1.34 billion.

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"Harley-Davidson managed through a weak U.S. economy during 2007," said CEO Jim Ziemer, in a prepared statement. "As we announced in September, we reduced our wholesale motorcycle shipment plan for the fourth quarter, fulfilling our commitment to our dealers to ship fewer Harley-Davidson motorcycles than we expected our dealers worldwide to sell at retail during 2007."

Still, the motorcycle maker's international dealer network delivered double-digit retail sales growth in the fourth quarter and for the full year.

For 2008, the company again plans to ship fewer Harley-Davidson bikes than it expects its worldwide dealer network to sell. Harley also predicts moderate revenue growth, a lower operating margin and diluted earnings per share growth of 4% to 7% vs. 2007.

In the first quarter, Harley is planning to ship between 68,000 and 72,000 Harley-Davidson motorcycles, compared with 67,761 units in the same period last year. Shipments totaled 81,206 units in the fourth quarter, a decrease of 11,642 units, or 12.5%, compared with the last quarter of 2006.

"Looking ahead, we will continue to manage the company to generate long-term sustainable shareholder value while protecting the brand," Ziemer said. "We expect the U.S. economy to continue to be very challenging in 2008, and we will closely monitor the retail environment and regularly assess our wholesale shipments throughout the year."

This article was written by a staff member of TheStreet.com.