Harley-Davidson Q2 Profit Down, Tops Estimates; Cuts FY17 Forecast - Quick Facts

(RTTNews) - Harley-Davidson, Inc. (HOG) Tuesday reported that it is lowering full-year 2017 shipment and margin guidance, citing the U.S. industry challenges in the second quarter and the importance of the supply and demand balance for its premium brand. In the second quarter, profit declined, but topped market estimates, while revenues missed their view.

In pre-market activity on the NYSE, Harley-Davidson shares were losing 6.5 percent to $48.62.

Harley-Davidson now expects to ship 241,000 to 246,000 motorcycles to dealers worldwide in 2017, which is down approximately 6 percent to 8 percent from 2016. The company had previously provided full-year shipment guidance of flat to down modestly in comparison to 2016.

In the third quarter, the company expects to ship 39,000 to 44,000 motorcycles, which is down approximately 10 percent to 20 percent from 2016.

The company now expects full-year 2017 operating margin to be down approximately 1 percentage point compared to 2016. The company continues to expect 2017 capital expenditures to be $200 million to $220 million.

In its second quarter, Harley-Davidson's net income was $258.9 million, down from last year's $280.4 million. Earnings per share decreased 4.5 percent to $1.48 from $1.55 last year.

Consolidated revenue was $1.77 billion, lower than $1.86 billion for the same period in 2016. Motorcycles and related products revenue declined to $1.58 billion from $1.67 billion a year ago largely due to lower motorcycle shipments.

On average, analysts polled by Thomson Reuters expected earnings of $1.38 per share on revenues of $1.59 billion for the quarter. Analysts' estimates typically exclude special items.

Harley-Davidson worldwide retail motorcycle sales were down 6.7 percent. Retail motorcycle sales in the U.S. were down 9.3 percent. Harley-Davidson's international retail sales decreased 2.3 percent.

New retail motorcycle sales in the U.S. were down primarily driven by weak industry conditions. New retail sales internationally were also down but generally in-line with company expectations for the second quarter of 2017.