Will Currency Headwinds Hit Harley-Davidson Q4 Results?

(RTTNews) - Motorcycle maker Harley-Davidson Inc. (HOG) expects to return to growth on back of its new 2016 model year motorcycles, increased investment in demand-driving actions, improved product availability and the overall strength of the Harley-Davidson brand. Meanwhile, the company sees heightened competitive environment to continue in the near future.

The company also remains focused on increasing product and brand awareness, growing new ridership in the U.S., increasing and enhancing brand access, and accelerating the cadence and impact of new products.

The company's fourth-quarter numbers are scheduled to be released before the bell on Thursday, January 28, with analysts polled by Thomson Reuters expecting earnings of $0.19 per share on revenue of $1.03 billion.

In the fourth quarter, the company expects to ship 47,000 - 52,000 motorcycles, compared to 47,157 motorcycles shipped in the year-ago period.

Harley-Davidson expects to incur one-time expenses of about $30 million - $35 million in the fourth quarter of 2015, primarily for employee separation and reorganization costs related to this reallocation.

Harley-Davidson revised down its full-year 2015 guidance for motorcycle shipments, reflecting its commitment to managing supply in line with demand, and now expects to ship 265,000 - 270,000 motorcycles to dealers and distributors worldwide in 2015, which is approximately flat to down 2% from 2014. The company had earlier provided full-year shipment guidance of 276,000 - 281,000 motorcycles.

In 2016, Harley-Davidson plans to increase its investment in customer-facing marketing by about 65% and investment in new product development by about 35% from 2015 levels. The company intends to fund these by reallocating existing spending.

In the previous quarter, Harley-Davidson reported net income of $140.3 million or $0.69 per share, compared to $150.1 million or $0.69 per share in the prior-year period. On average, 19 analysts polled by Thomson Reuters expected earnings of $0.78 per share. Analysts' estimates typically exclude certain special items.

Consolidated revenue improved 1.5% to $1.32 billion from $1.30 billion last year. Motorcycles and related products revenues edged up to $1.14 billion from $1.13 billion last year. Analysts expected revenue of $1.21 billion for the quarter.

The company said that dealers worldwide sold 72,178 new Harley-Davidson motorcycles in the third quarter, down 1.4% from last year.