So, maybe it would seem high gas prices are providing a buffer for Harley Davidson (HOG) against the economy?
Harley-Davidson (HOG) reported Q2 EPS of $0.95 this morning, 19 cents better than estimates. Revenue for the quarter was $1.57 billion vs. consensus of $1.4 billion.
“During the second quarter we shipped 80,326 Harley-Davidson® motorcycles to our dealers and distributors around the world. While this result exceeds our guidance range of 76,000 to 80,000 units for the quarter, it is a decrease of 15.6 percent from the year-ago period. This decrease reflects the impact of the shipment reduction we announced April 17th in response to ongoing weakness in the U.S. economy,” said Jim Ziemer, CEO.
For the first six months of 2008, revenue totaled $2.88 billion, a 2.9 percent increase over the year-ago period. Earnings per share were $1.74, a decrease of 7.9 percent compared to the same period last year.
Through the first six months of this year, shipments of Harley-Davidson motorcycles were 152,194 units, a 6.6 percent decrease compared to last year’s 162,878 units.
The Company expects to ship between 74,000 and 78,000 Harley-Davidson motorcycles during the third quarter of 2008. For the full year of 2008, Harley-Davidson still plans to ship between 303,500 and 307,500 units. The Company continues to expect full-year EPS of $3.00 to $3.18.
The Company repurchased 1.3 million shares of its common stock at a cost of $50.0 million during the second quarter of 2008. On June 29, 2008, the Company had 235.3 million shares of common stock outstanding. As of June 29, 2008, there were 19.3 million shares remaining on a board- approved share repurchase authorization.
When one consider the current economic environment and credit conditions out there, these results really are fantastic. Far from a “luxury item”, it would seem motorcycles, especially Harley are becoming the alternative of choice for gas pained consumers.
Here is the kicker, when credit conditions improve, sales ought to increase even further. One really ought not expect oil and gas prices to fall very far anytime soon so motorcycles as an alternative will remain while becoming more affordable.
International sales, the current growth of the company grew 11%. What will be interesting and I hope it is asked on the earnings call is what contribution can be expected from the recent acquisition. Also, can someone ask is the double digit growth these is expected to continue for a while?
Disclosure (“none” means no position):Long HOG
Visit the ValuePlays Bookstore for Great Investing Books
3 replies on “Harley Davidson Crushes Estimates”
crushes estimates??? Comon you better than that.
Those estimates on all stocks were ratchet down for the past several quarters so companies can beat. all these earning positive surprises are garbage as most companies did not grow earnings over the same period previous year. stocks might move in the short term but i do not see these”surprises” and “beating estimates” as positive. intrinsic values are declining for most companies.
sami,
it is good news. it goes to perception. perception was dire and results prove otherwise…
sure, values are falling but, not nearly as bad as people think…
thus “value investing” is created
Hi Todd,
Thanks for your article; good analysis.
One thing I’m not clear about is how you draw the link between high gas prices and Harley beating estimates. As a result of high gas prices, it seems just as plausible that potential Harley buyers are trading down to more fuel efficient bikes, rather than car buyers switching to Harleys, unless you had some other info I’m not familiar with.
Thanks and keep up the good work!
-Saj