Harley-Davidson's Better-Than-Expected Earnings: Foreign Markets Offer Silver Lining
Harley-Davidson's just-released second quarter sales figures reflect a 23% profit drop (to $222.8 million compared to last year's comparable quarter), and a 2.9% drop in sales to $1.57 billion, according to Reuters. Though the numbers look dire, they're not as bad as expected. "The key there was shipments," according to Robin Diedrich, an Edward Jones analyst cited in the article.
Last year was a brutal one for Harley, with one stock falter leading to another. While the entire motorcycle industry was down, Harley's premium products were especially susceptible to high gas prices, a troubled housing market, and a weak economy-- especially after a grim first quarter which led to slashed production. The heavyweight bike market actually grew domestically in the second quarter of 2008 while Harley's market share slipped, but that news was buoyed by 8.7% higher sales in Canada, 9% increases in Europe, and a 7.3% bump in the Asia-Pacific region.
Unless American buyers drastically change their purchasing habits, it's looking like the bright spot will continue to be foreign markets-- which sheds light on why the acquisition of MV Agusta and the not-available-in-the-U.S. XR1200 actually make sense for the Motor Company.
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Comments
What percentage was contributed to crappy quality and lousy service…?
Squidward…you sound familiar…have you posted before?
Basem…I can only imagine H-D is watching very closely what’s happening with GM right now. I should think the cause of their woes is not that dissimilar.
I’m not an H-D fan, but it would be a shame to see them fall on times hard enough to cause anything really terrible to happen. I can’t think the American tax payers are too big on the Gov’t bailing them out either.
Unlike GM they seem to be taking some constructive steps.
Great article on chain care by the way! Taking care of a chain is very easy if you do it right.
They will still make more than $800,000,000 this year, where as the auto companies have been mostly losing for the last few years.
Like Harley, GM and Ford are both seeing the power of diversifying abroad… more for GM than Ford, but either way it’s absolutely necessary to be globally invested these days.
I just hope the domestics find a way to stay American; look at Budweiser’s purchase by InBev, for instance, and the fact that Levi’s jeans aren’t even made in the U.S.A. any more… what’s next?
Basem
What’s next? A lady informed me that a certain retailer who shall not be named is now owned by China. My stock reports said nothing about it. Why am I always the last to know…….
Squidward, tell Spongebob I said hi!
About sales rising with 9% in Europe, how can it be? In the Old Days we, in The Netherlands, multiplied the dollarprice by 4 in order to get roughly the saleprice for both the bikes and the parts(in Dutch guilders). But now our ‘Euro’is worth more than 50% of the dollar I can’t understand how the Harley-folks manage to risen the prices for new Harley’s every year! When you ask a dealer he mumbles “costs of new innovations must be payed”etc. My ass! If Harley is wise, they should sell their bikes against today’s exchangerates. We will be very happy and they will sell much more bikes!