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Harley-Davidson (HOG) Q3 Earnings: What's in the Offing?
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Harley-Davidson, Inc. (HOG - Free Report) is set to report third-quarter 2018 results on Oct 23, before the opening bell. In the last reported quarter, it delivered positive surprise of 7.4%. Out of the trailing four quarters, the company surpassed estimates in three while meeting in one. The average positive surprise was 10.13%.
In the past three months, shares of Harley-Davidson have outperformed the industry it belongs to. The stock has lost 4.7% compared with the industry’s 15.7% decline.
Let’s see, how things have shaped up for the upcoming announcement.
For third-quarter 2018, Harley-Davidson anticipates total motorcycle shipments of 45,500-50,500 units compared with 39,000-44,000 expected in the year-ago period. For the to-be-reported quarter, the Zacks Consensus Estimate for total motorcycle shipments is 48,044 units.
For the soon-to-be-released quarterly results, the Zacks Consensus Estimate for total revenues of Motorcycles and Related Products segment is pegged at $1.1 billion, down from the second quarter’s total revenues of $1.53 billion.
Similarly, the consensus estimate for total revenues of the company’s Financial Services segment stands at $191 million, declining from the second quarter’s total revenues of $188 million.
To avoid increased tariffs, Harley-Davidson decided to shift manufacturing location of its motorcycles sold in Europe from the United States to international facilities. Ramping up production at these international hubs will require investments, which will lead to rise in costs for the company.
Further, before international hubs get upgraded, Harley-Davidson has to keep paying high tariffs for motorcycles imported from the United States to Europe. As of June, the company estimated tariff-related costs of roughly $30-$45 million for the rest of 2018.
However, Harley-Davidson has been focusing on offering innovative products to remain at par with changing consumer demands. In July, it shared growth plan through 2022. Per the plan, the company aims to revive its U.S. business through investments, while accelerating pace of international growth.
Earnings Whispers
Our proven model does not conclusively show that Harley-Davidson is likely to beat earnings estimates this quarter. This is because, a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: Harley-Davidson has an Earnings ESP of -2.13% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 46 cents and 47 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Harley-Davidson currently carries a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
PACCAR Inc. (PCAR - Free Report) has an Earnings ESP of +0.62% and is a #3 Ranked player. Its third-quarter 2018 results are slated to be announced on Oct 23.
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.73% and a Zacks Rank #3. Its third-quarter 2018 results are scheduled to be released on Oct 30.
Advance Auto Parts, Inc. (AAP - Free Report) has an Earnings ESP of +2.92% and has a Zacks Rank of 1. The company is expected to report third-quarter 2018 results on Nov 13.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Harley-Davidson (HOG) Q3 Earnings: What's in the Offing?
Harley-Davidson, Inc. (HOG - Free Report) is set to report third-quarter 2018 results on Oct 23, before the opening bell. In the last reported quarter, it delivered positive surprise of 7.4%. Out of the trailing four quarters, the company surpassed estimates in three while meeting in one. The average positive surprise was 10.13%.
In the past three months, shares of Harley-Davidson have outperformed the industry it belongs to. The stock has lost 4.7% compared with the industry’s 15.7% decline.
Let’s see, how things have shaped up for the upcoming announcement.
Harley-Davidson, Inc. Price and EPS Surprise
Harley-Davidson, Inc. Price and EPS Surprise | Harley-Davidson, Inc. Quote
Factors Influencing This Quarter
For third-quarter 2018, Harley-Davidson anticipates total motorcycle shipments of 45,500-50,500 units compared with 39,000-44,000 expected in the year-ago period. For the to-be-reported quarter, the Zacks Consensus Estimate for total motorcycle shipments is 48,044 units.
For the soon-to-be-released quarterly results, the Zacks Consensus Estimate for total revenues of Motorcycles and Related Products segment is pegged at $1.1 billion, down from the second quarter’s total revenues of $1.53 billion.
Similarly, the consensus estimate for total revenues of the company’s Financial Services segment stands at $191 million, declining from the second quarter’s total revenues of $188 million.
To avoid increased tariffs, Harley-Davidson decided to shift manufacturing location of its motorcycles sold in Europe from the United States to international facilities. Ramping up production at these international hubs will require investments, which will lead to rise in costs for the company.
Further, before international hubs get upgraded, Harley-Davidson has to keep paying high tariffs for motorcycles imported from the United States to Europe. As of June, the company estimated tariff-related costs of roughly $30-$45 million for the rest of 2018.
However, Harley-Davidson has been focusing on offering innovative products to remain at par with changing consumer demands. In July, it shared growth plan through 2022. Per the plan, the company aims to revive its U.S. business through investments, while accelerating pace of international growth.
Earnings Whispers
Our proven model does not conclusively show that Harley-Davidson is likely to beat earnings estimates this quarter. This is because, a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: Harley-Davidson has an Earnings ESP of -2.13% as the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 46 cents and 47 cents, respectively. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Harley-Davidson currently carries a Zacks Rank #4 (Sell). Note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few stocks worth considering from the same space, with the right combination of elements to outpace earnings estimates this time around:
PACCAR Inc. (PCAR - Free Report) has an Earnings ESP of +0.62% and is a #3 Ranked player. Its third-quarter 2018 results are slated to be announced on Oct 23.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.73% and a Zacks Rank #3. Its third-quarter 2018 results are scheduled to be released on Oct 30.
Advance Auto Parts, Inc. (AAP - Free Report) has an Earnings ESP of +2.92% and has a Zacks Rank of 1. The company is expected to report third-quarter 2018 results on Nov 13.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>