Harley-Davidson's stock skids as global motorcycle shipments fall
By Steve Gelsi
Motorcycle icon beats analyst estimates, but shares fall by 15.4%
Harley-Davidson Inc.'s stock fell more than 15% on Thursday after the company said its motorcycle sales fell and its margins narrowed.
Investors brushed aside first-quarter profit and revenue at Harley-Davidson (HOG) that topped analyst estimates.
The company said its first-quarter global motorcycle shipments dropped by 7%, in line with its prior expectations.
The drop in revenue was fueled by a decrease in wholesale shipments and lower global pricing, the company said.
Operating margin fell to 16.2% in the first quarter from 21.6% in the year-ago period.
Harley's net income for the three months that ended March 31 dropped to $234.94 million, or $1.72 a share, from $304.09 million, or $2.04 a share, in the year-ago quarter.
The Milwaukee-based manufacturer delivered a solid beat over the FactSet consensus estimate of $1.51 a share.
First-quarter revenue dipped to $1.48 billion from $1.56 billion in the year-ago period but came in ahead of the analyst estimate of $1.35 billion.
Wall Street was not impressed even though Harley-Davidson cited 6% retail growth in North American sales and said it was "pleased" with the reception to its new Touring product line.
Looking ahead, Harley-Davidson cut its estimated 2024 operating loss for its LiveWire line of electric-powered motorcycles by $10 million, to a range of $105 million to $115 million.
For 2024, the company continues to expect its motorcycle division to generate revenue that will be flat to down 9% from the prior year, with operating-income margin of 12.6% to 13.6%.
CFRA analyst Garrett Nelson reiterated a hold rating on Harley-Davidson and hiked his 12-month price target by $5 to $40. The company's gross margin was narrower than expected, he said.
"With growing pressure on consumer discretionary spending, we think HOG's unchanged guidance despite a significantly better-than-expected Q1 reflects caution as it pertains to its motorcycle sales and margins for the balance of the year," Nelson said.
Harley-Davidson's stock has now fallen 9.7% in 2024, compared with a 5.8% increase by the S&P 500 SPX.
-Steve Gelsi
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
04-25-24 1438ET
Copyright (c) 2024 Dow Jones & Company, Inc.-
What’s Happening in the Markets This Week
-
Worst-Performing Stock ETFs of the Quarter
-
Q3 in Review and Q4 2024 Market Outlook
-
Top-Performing Stock ETFs of the Quarter
-
September Jobs Report Forecasts Show Moderate Hiring Gains
-
Port Strike a Headache for Shippers but a Potential Tailwind for Certain US Transport Stocks
-
13 Charts on Q3′s Roller-Coaster Rally for Stocks and Bonds
-
5 Stocks to Buy Instead of Overpriced US Equities
-
Consumer Defensives: Despite Angst, Thirsty Investors Have Names to Pursue
-
Industrials: Many Stocks Overvalued After Q3 Outperformance
-
Basic Materials: Despite Index Rise, We See Multiple Long-Term Opportunities
-
What the Election Could Mean for Big Tech Stocks
-
3 Lessons From Recent Stock Market Drama
-
Consumer Cyclicals: Even Amid Moderating Consumer Spending, We See Discounts
-
Healthcare: Valuations Look Fair Overall, With Select Industries Still Undervalued
-
Utilities: Falling Interest Rates, Growth Outlook Boosting Stocks