A Harley-Davidson motorcycle
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With the U.S. still in the grip of the Covid-19 pandemic despite encouraging vaccine rates, Americans are still taking road trips. That was evident in Harley-Davidson’s first quarter, as the maker of iconic motorcycles reported upbeat results and raised its forecast. That overshadowed tariff news from the European Union.
Harley-Davidson (ticker: HOG) earned $259.1 million, or $1.68 a share; adjusted earnings, which strip out non-recurring items, also came in at $1.68 a share. Revenue rose more than 29% to $1.42 billion. Analysts were looking for EPS of 90 cents on revenue of $1.25 billion.
Robust demand for touring bikes led to a 12% increase in motorcycles and related products. Revenue from financial services fell 4% to $190 million, but the division’s operating income improved, due to lower credit-loss provisions.
For the full year, Harley-Davidson now expects revenue to grow between 30% and 35%, up from prior guidance of 20% to 25%. It also boosted expectations for operating-income margin, and financial-services operating income.
The better-than-expected results and outlook helped investors look past an unfavorable import ruling from the European Union.
Harley-Davidson said the bloc’s Economic Ministry notified the company that it may revoke the credentials that allow the company to pay a 6% tariff rate on certain motorcycles produced at international facilities for EU markets. The company plans to appeal the ruling, which it said would subject all Harley-Davidson products to a 56% import tariff in the EU.
Harley-Davidson stock is up 8.4% to $43.77 in recent trading. The shares have gained 10% year to date, and are up nearly 118% in the latest 12 months.
The first-quarter results were a pleasant contrast to Harley-Davidson’s disappointing fourth quarter, delivered in February, and some analysts have been getting more bullish on the shares.
In addition, while the ruling from the EU isn’t ideal, it’s also not necessarily news to Harley-Davidson investors; nor is the company any stranger to trade woes.
Write to Teresa Rivas at [email protected]
