Shares of Harley-Davidson, Inc. HOG fell 2.6% since the company released its third-quarter 2024 results on Oct. 24, before the opening bell. HOG reported third-quarter adjusted earnings of 91 cents per share, which beat the Zacks Consensus Estimate of 82 cents but declined 34% year over year. The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1.15 billion, down 26% from the prior-year quarter.
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Harley-Davidson, Inc. Price, Consensus and EPS Surprise
Harley-Davidson, Inc. price-consensus-eps-surprise-chart | Harley-Davidson, Inc. Quote
Segmental Highlights
Harley-Davidson Motor Company: Total revenues from the Motorcycle and Related Products segment, constituting the bulk of the firm’s overall revenues, fell 32% on a year-over-year basis to $876 million but exceeded our forecast of $480.4 million on higher-than-expected motorcycle shipments. Motorcycle shipments worldwide decreased 39% to 27,500 units but topped our estimate of 15,166 units. In the quarter under review, revenues from the sale of motorcycles came in at $616 million, down 40% year over year. Operating income for the segment declined 69% to $55 million from $175 million in the corresponding quarter of 2023. We expected an operating loss of $139.4 million from the segment.
During the reported quarter, Harley-Davidson retailed 36,200 motorcycle units globally, down 13% year over year. Its retail motorcycle units sold in North America decreased 10% to 24,600. Sales in EMEA or Europe, the Middle East and Africa declined 23% year over year. Sales in the Asia Pacific contracted 16%, while Latin America sales rose 4% year over year.
Revenues for parts & accessories were down 6% from a year ago to $174 million but exceeded our estimate of $94.7 million. Revenues from apparel rose 13% year over year to $56 million and beat our projection of $53.4 million.
Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $269 million, up 10% year over year, and surpassed our forecast of $267.1 million. Operating income increased 29% to $77 million and topped our estimate of $56.1 million.
LiveWire: During the reported quarter, the total shipment for LiveWire was 99 units, climbing 98% from the year-ago quarter levels. Revenues declined 41% to $5 million. Operating loss widened from $25 million to $26 million. The reported loss was narrower than our projection of $29 million.
Financial Position
In the third quarter, selling, general and administrative expenses from the HDMC unit decreased to $208.7 million from $235.4 million in the year-ago quarter. The company paid dividends of 17.25 cents per share in the reported quarter.
Harley-Davidson had cash and cash equivalents of $2.24 billion as of Sept. 30, 2024, up from $1.53 billion as of Dec. 31, 2023. In the same period, the long-term debt decreased to $4.74 million from $4.99 million recorded as of Dec. 31, 2023.
HOG Revises 2024 Guidance
For 2024, the company now expects revenues from HDMC to be down 14-16% year over year compared with the previous guidance of a decline of 5-9%. The operating income margin expectation for the motorcycles segment is in the range of 7.5-8.5%, down from the previous estimate of 10.6-11.6%. HOG expects its operating income for Financial Services to rise 5-10% compared to 2023, up from the previous estimate of flat to 5%.
For the LiveWire segment, electric motorcycle wholesale units are expected to be in the range of 600-1,000, down from the prior expectation of 1,000-1,500. Operating loss for the segment is anticipated to be in the range of $105-$115 million. Capital expenditure projection for the full year is estimated to be in the range of $225-$250 million.
Zacks Rank & Key Picks
HOG currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM, Tesla, Inc. TSLA and BYD Company Limited BYDDY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved 75 cents and 88 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for TSLA’s 2024 sales suggests year-over-year growth of 2.94%. EPS estimates for 2024 and 2025 have improved by 20 cents and 13 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 23.61% and 28.42%, respectively. EPS estimates for 2024 and 2025 have improved by 14 cents and 21 cents, respectively, in the past seven days.
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