Harley-Davidson Q3 Profit Meets View, But Revenues Top; Backs 2013 Outlook

(RTTNews) - Motorcycle manufacturer Harley-Davidson, Inc. (HOG) reported Tuesday a profit for the third quarter that increased from last year, reflecting strong operating results in the motorcycles segment amid higher shipments and double-digit retail sales growth.

Earnings per share matched analysts' expectations, while quarterly revenues topped their estimates by a whisker. Further, the company reaffirmed its shipment forecast for the full-year 2013.

"Harley-Davidson had a great third quarter, with strong financial performance and retail sales growth," Chairman, President and CEO Keith Wandell said in a statement.

The Milwaukee, Wisconsin-based maker of heavyweight and sport motorcycles as well as accessories reported net income of $162.72 million or $0.73 per share for the third quarter, higher than $134.00 million or $0.59 per share in the prior-year quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $0.73 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 7.5 percent to $1.18 billion from $1.09 billion in the same quarter last year, and topped twelve Wall Street analysts' consensus estimate of $1.17 billion by a whisker.

Worldwide retail sales of new Harley-Davidson motorcycles increased 15.5 percent to 70,517, including a 20.1 percent increase in the U.S. to 48,529 from the prior-year quarter.

The company attributed the retail sales growth to strong double-digit growth in the sale of touring motorcycles following the third-quarter launch of its 'Project Rushmore' line of revamped motorcycles.

Dealers sold 21,988 new Harley-Davidson motorcycles in international markets during the quarter, up 6.5 percent from 20,651 motorcycles in the year-ago quarter, with unit sales up 10.0 percent in the Asia Pacific region, 1.6 percent in the EMEA region, 15.6 percent in the Latin America region, and 7.0 percent in Canada.

Revenue from motorcycles grew 10.7 percent to $857.0 million, with a 2.3 percent increase in motorcycles shipment to dealers and distributors worldwide to 54,025 motorcycles as international shipment growth was partially offset by a decline in domestic shipments.

Revenue from motorcycle parts and accessories increased 7.0 percent to $250.2 million, while revenue from general merchandise, which includes MotorClothes apparel and accessories, declined 12.6 percent to $66.1 million from last year.

Gross margin for the quarter improved 60 basis points to 35.3 percent from last year's 34.7 percent.

Restructuring expense for the quarter was $0.65 million, compared to $9.17 million in the prior-year quarter.

Looking ahead, Harley-Davidson continues to expect to ship 259,000 to 264,000 motorcycles to dealers and distributors worldwide in 2013. The company also still expects full-year gross margin of 35.25 to 36.25 percent. Additionally, it continues to expect capital expenditures of $200 million to $220 million in 2013.

The company also said it continues to estimate savings of about $305 million in 2013 from restructuring activities initiated since 2009, rising to annual ongoing savings of about $320 million beginning in 2014.

In Tuesday's regular trading session, HOG is currently trading at $64.19, down $1.38 or 2.10% on a volume of 1.05 million shares.