Harley-Davidson profit rises; shipment forecast unchanged
(Reuters) - Harley-Davidson Inc (HOG.N) reported higher quarterly earnings on Tuesday, lifted by the normal summer surge in motorcycle sales in its key North American market, but it kept the full-year forecast for its global shipments unchanged.
The results, which were in line with expectations, suggested U.S. consumer confidence - which hit a six-year high this summer thanks to rising home and stock prices and the recovering job market - remains resilient and that the appetite for high-ticket, discretionary purchases remains high.
But Harley-Davidson said that sales in Europe continued to be hurt by "ongoing macroeconomic challenges," particularly in Southern Europe.
The company posted a third-quarter profit of $162.7 million, or 73 cents a share, up from $134.0 million, or 59 cents a share, a year earlier.
Overall revenue from bikes, parts and accessories, financial services and apparel rose 7 percent to $1.34 billion.
The results were in line with market expectations, according to Thomson Reuters I/B/E/S.
"They basically did everything they said they would, and they haven't changed their guidance," said Morningstar analyst Jaime Katz.
Worldwide retail sales of Harley-Davidson motorcycles rose 15.5 percent, led by a 19 percent jump in North America, where the company sells roughly two-thirds of its bikes.
Harley-Davidson said it still expected to ship 259,000 to 264,000 motorcycles to dealers and distributors worldwide in 2013.
But the company said the sales it believed lost in the second quarter of this year because of an unusually cool, wet spring in North America would not be recovered in the final quarter of the year and would make it hard for the company to reach the high end of its 2013 shipment guidance.
Harley-Davidson's worldwide shipment levels peaked at about 350,000 units in 2006, right before the U.S. housing bubble burst and consumer demand for Harley-Davidson's motorcycles - which are priced from $8,000 to more than $30,000 - skidded into a ditch along with the broader economy.
The Milwaukee-based company, which announced a recall of nearly 30,000 bikes earlier this month, said it expects to take a $4.9 million charge in the fourth quarter to cover the cost of the required fix.
In early morning trading on the New York Stock Exchange, Harley-Davidson shares were down 1.3 percent at $64.74.
(Reporting by James B. Kelleher; Editing by Gerald E. McCormick, Maureen Bavdek, Lisa Von Ahn and Nick Zieminski)
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