) decided to raise 2013-first quarter dividend by 35.5% to 21
cents from 15.5 cents as it continues to benefit from
restructuring activities. The increased dividend will be payable
on Mar 1 to shareholders of record as of Feb 19.
Harley believes in a consistent dividend payment policy with
raises almost every year. It is only in 2009, that the motorcycle
maker reduced dividend sharply by 69.7% to 10 cents from 33 cents
owing to waning demand for its motorcycles on the back of global
economic recession. After paying the same dividend from 2009
through 2010, the company raised dividend by 25% to 12.5 cents
for the second quarter of 2011 and then again by 24% to 15.5
cents for all the quarters in 2012.
Harley posted a 29.2% rise in earnings per share to 31 cents in
the fourth quarter of 2012 from 24 cents in the same quarter of
2011. The EPS was in line with the Zacks Consensus Estimate. Net
income grew 29.3% to $70.6 million from $54.6 million in the
fourth quarter of 2011.
However, consolidated revenues in the quarter slid 0.8% to $1.17
billion in the quarter due to announced plans for lower shipments
related to the implementation of seasonal surge production at
York facility in the first half of 2013. Nevertheless, it was
higher than the Zacks Consensus Estimate of $982 million.
Operating income improved 25.7% to $116.1 million, mainly driven
by significantly lower restructuring expenses.
For the full year 2012, Harley's EPS increased 16.7% to $2.72
from $2.33 a year ago. However, the EPS was lower than the Zacks
Consensus Estimate of $2.74. Net income gained 13.8% to $623.9
million. Meanwhile, consolidated revenues grew 5.1% to $5.58
billion, exceeding the Zacks Consensus Estimate of $4.91 billion.
The improvement in revenues and profits was attributable to the
company's strong product portfolio and positive impact from its
Harley realized savings of $280.0 million in 2012 from
restructuring activities initiated in early 2009. The company
incurred restructuring charges of $1.6 million in the quarter and
$28.5 million in the year.
Upon completion of restructuring activities in this year, Harley
expects restructuring actions to result in one-time overall costs
of $495.0 million, including $13.0 million in 2013. The company
expects savings of $305.0 million in the year from restructuring
activities, leading to annual ongoing savings of $320.0 million
beginning in 2014.
In 2013, Harley expects to ship 259,000 to 264,000 motorcycles to
dealers and distributors worldwide, reflecting roughly 4.5%-6.5%
increase from 2012. In the first quarter of 2013, the company
expects to ship 71,000 to 76,000 motorcycles, an increase of
10%-18% from the year-ago quarter. Harley also expects gross
margin between 35.25% and 36.25 % for the full year. It expects
capital expenditures between $200 million and $220 million for
Since the latest announcement of dividend increase on Feb 5, the
company's shares rose 1.8% to $53.49 after the market closed
yesterday, which is close to the 52-week high of $54.62. The
stock currently retains a Zacks Rank #3 (Hold).
Few stocks that are performing well in the industry where the
company operates include
Commercial Vehicle Group Inc.
STRATTEC SECURITY CORPORATION
). They carry a Zacks Rank #1 (Strong Buy).
COMML VEHICLE (CVGI): Free Stock Analysis
HARLEY-DAVIDSON (HOG): Free Stock Analysis
OSHKOSH CORP (OSK): Free Stock Analysis
STRATTEC SEC CP (STRT): Free Stock Analysis
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