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HarleyDavidson Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2012 12:23PM
HarleyDavidson Inc. (HOG) filed Quarterly Report for the period ended 2012-07-01. Harley-davidson, Inc. has a market cap of $9.81 billion; its shares were traded at around $41.79 with a P/E ratio of 15 and P/S ratio of 2.1. The dividend yield of Harley-davidson, Inc. stocks is 1.5%. Harley-davidson, Inc. had an annual average earning growth of 0.2% over the past 10 years.
Highlight of Business Operations:During the second quarter of 2012, worldwide independent dealer retail sales of new Harley-Davidson motorcycles grew 2.8% compared to 2011, including a 4.0% increase in the U.S. and a 0.5% increase in international markets. Through six months, retail sales grew 9.3%, including increases of 12.0% and 4.5% in the U.S. and international markets, respectively. As expected, retail sales growth rates moderated in the second quarter due to an unusually warm spring in the U.S. that pulled some retail sales forward into the first quarter. The Company continues to remain cautious about its expectations for retail sales globally in an environment of greater economic uncertainty, including in Europe where retail sales have been affected by the challenging Eurozone economy.
Worldwide independent dealer retail sales of Harley-Davidson motorcycles increased 2.8% during the second quarter of 2012 compared to the second quarter of 2011. Retail sales of Harley-Davidson motorcycles increased 4.0% in the United States and 0.5% internationally in the quarter. The following table includes retail unit sales of Harley-Davidson motorcycles:
The Company shipped 83,502 Harley-Davidson motorcycles worldwide during the second quarter of 2012, which was 25.0% higher than the second quarter of 2011 and in line with Company expectations. During the second quarter of 2012 shipments were higher as the Company depleted its 2012 model-year motorcycle inventory in the U.S. in anticipation of the July 2, 2012 ERP launch at its York, PA facility and the 2013 model year cut-over. International shipments as a percent of the total shipments were down slightly compared to last year given the strong 2012 U.S. first quarter retail sales and tight retail inventory levels in the domestic market. U.S. dealer inventory of new Harley-Davidson motorcycle units was approximately 6,800 higher at the end of the 2012 second quarter than at the end of the year ago period. Despite the increase in retail inventory at the end of the second quarter, the Company continues to expect retail inventory in the U.S. will be below year ago levels for most of the third quarter, due to lower shipments versus prior year as a result of the production lost during the ERP implementation, and due to the later date of the Summer Dealer Meeting which will take place in August 2012 compared to July 2011. The Company announced on August 1, 2012 that it anticipates shipping between 51,000 to 56,000 Harley-Davidson motorcycle units in the third quarter of 2012.(1)
The Company continues to believe that 2012 operating income from Financial Services will decrease compared to 2011 due to lower net interest income as the portfolio of retail finance receivables continues to contract as a result of lower U.S. retail sales over the last few years and a modest tightening of margins on prime tier retail lending due to a more competitive lending environment. In addition, while credit performance has continued to improve, the Company expects a smaller benefit from allowance releases during 2012 as compared to 2011. (1) Although the Company expects lower operating income in 2012 compared to 2011, it expects to continue to report positive operating income in 2012. (1)
Worldwide independent dealer retail sales of Harley-Davidson motorcycles increased 9.3% during the first half of 2012 compared to the first half of 2011. Retail sales of Harley-Davidson motorcycles increased 12.0% in the United States and 4.5% internationally in the first half of 2012. On an industry-wide basis, the heavyweight (651+cc) portion of the market was up 7.9% in the United States and down 8.6% in Europe for the six months ended June 30, 2012 when compared to the same periods in 2011. The following table includes retail unit sales of Harley-Davidson motorcycles:
Stocks Discussed: HOG,