Harley-Davidson, Inc. (HOG - Free Report) reported third-quarter 2023 adjusted earnings of $1.38 per share, which missed the Zacks Consensus Estimate of $1.39 and declined 22% year over year. Lower-than-anticipated revenues from the Motorcycles & Related Products primarily resulted in the underperformance. The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,549 million, down 6% from the prior-year quarter.
Segmental Highlights
Harley-Davidson Motor Company: Total revenues from the Motorcycle and Related Products segment, constituting the bulk of the firm’s overall revenues, decreased 9% on a year-over-year basis to $1,297 million and missed our forecast of $1,353 million on lower-than-expected motorcycle shipments. The operating income for the segment decreased to $175 million from $279 million in the corresponding quarter of 2022.
In the quarter under review, revenues from the sale of motorcycles came in at $1,023 million, down 9% year over year. The company’s global shipments came in at 45,300 motorcycles, down 20% and also fell short of our projection of 52,145 units.
During the reported quarter, Harley-Davidson retailed 41,700 motorcycle units globally, down 16% year over year. Its retail motorcycle units sold in North America decreased 15% to 27,300. Sales in EMEA (Europe, the Middle East and Africa), Asia Pacific and Latin America declined 13%, 24% and 11%, respectively, on a year-over-year basis.
Revenues for parts & accessories were down 8% from a year ago to $185 million and missed our estimate of $204 million. Revenues from apparel tailed off 29% year over year to $49 million and missed our projection of $75 million.
Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $244 million, up 15% year over year, and exceeded our forecast of $202 million. Operating income declined 27% to $59 million and missed our estimate of $60 million.
LiveWire: During the reported quarter, the total shipment for LiveWire was 50 units, down 76% compared with the year-ago quarter levels. Revenues declined 45% to $8 million and matched our estimate. Operating loss widened from $21 million to $25 million, in line with our projection.
Financial Position
In the third quarter, selling, general and administrative expenses from the HDMC unit increased to $235.4 million from $210.2 million in the year-ago quarter. The company paid dividends of 16.50 cents per share in the reported quarter.
Harley-Davidson had cash and cash equivalents of $1.87 billion as of Sep 30, 2023, up from $1.43 billion as of Dec 31, 2022. In the same period, long-term debt increased to $5.85 billion from $4.45 million recorded on Dec 31, 2022.
2023 Guidance
For 2023, the company expects revenues from HDMC to be flat to up 3%. The operating income margin expectation for the motorcycle segment is in the range of 13.9% to 14.3%. HOG expects its operating income for Financial Services to decline 20-25%. For the LiveWire segment, motorcycle wholesale units are expected to be in the range of 600-1,000. Operating loss for the segment is anticipated to be in the range of $115-$125 million. Capital expenditure projection for the full year is in the range of $225-$250 million.
Zacks Rank and Key Picks
HOG currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the auto space include Toyota (TM - Free Report) , Honda (HMC - Free Report) and Nissan (NSANY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and EPS implies year-over-year growth of 10.5% and 27.5%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 4 cents and 21 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s fiscal 2024 sales and EPS implies year-over-year growth of 7.7% and 29.4%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 4 cents and 7 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for NSANY’s fiscal 2024 EPS implies year-over-year growth of 12.6%. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 10 cents and 3 cents, respectively, in the past 30 days.
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Harley-Davidson, Inc. (HOG - Free Report) reported third-quarter 2023 adjusted earnings of $1.38 per share, which missed the Zacks Consensus Estimate of $1.39 and declined 22% year over year. Lower-than-anticipated revenues from the Motorcycles & Related Products primarily resulted in the underperformance. The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,549 million, down 6% from the prior-year quarter.
Segmental Highlights
Harley-Davidson Motor Company: Total revenues from the Motorcycle and Related Products segment, constituting the bulk of the firm’s overall revenues, decreased 9% on a year-over-year basis to $1,297 million and missed our forecast of $1,353 million on lower-than-expected motorcycle shipments. The operating income for the segment decreased to $175 million from $279 million in the corresponding quarter of 2022.
In the quarter under review, revenues from the sale of motorcycles came in at $1,023 million, down 9% year over year. The company’s global shipments came in at 45,300 motorcycles, down 20% and also fell short of our projection of 52,145 units.
During the reported quarter, Harley-Davidson retailed 41,700 motorcycle units globally, down 16% year over year. Its retail motorcycle units sold in North America decreased 15% to 27,300. Sales in EMEA (Europe, the Middle East and Africa), Asia Pacific and Latin America declined 13%, 24% and 11%, respectively, on a year-over-year basis.
Revenues for parts & accessories were down 8% from a year ago to $185 million and missed our estimate of $204 million. Revenues from apparel tailed off 29% year over year to $49 million and missed our projection of $75 million.
Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $244 million, up 15% year over year, and exceeded our forecast of $202 million. Operating income declined 27% to $59 million and missed our estimate of $60 million.
LiveWire: During the reported quarter, the total shipment for LiveWire was 50 units, down 76% compared with the year-ago quarter levels. Revenues declined 45% to $8 million and matched our estimate. Operating loss widened from $21 million to $25 million, in line with our projection.
Financial Position
In the third quarter, selling, general and administrative expenses from the HDMC unit increased to $235.4 million from $210.2 million in the year-ago quarter. The company paid dividends of 16.50 cents per share in the reported quarter.
Harley-Davidson had cash and cash equivalents of $1.87 billion as of Sep 30, 2023, up from $1.43 billion as of Dec 31, 2022. In the same period, long-term debt increased to $5.85 billion from $4.45 million recorded on Dec 31, 2022.
2023 Guidance
For 2023, the company expects revenues from HDMC to be flat to up 3%. The operating income margin expectation for the motorcycle segment is in the range of 13.9% to 14.3%. HOG expects its operating income for Financial Services to decline 20-25%. For the LiveWire segment, motorcycle wholesale units are expected to be in the range of 600-1,000. Operating loss for the segment is anticipated to be in the range of $115-$125 million. Capital expenditure projection for the full year is in the range of $225-$250 million.
Zacks Rank and Key Picks
HOG currently carries a Zacks Rank #3 (Hold).
A few top-ranked players in the auto space include Toyota (TM - Free Report) , Honda (HMC - Free Report) and Nissan (NSANY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TM’s fiscal 2024 sales and EPS implies year-over-year growth of 10.5% and 27.5%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 4 cents and 21 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s fiscal 2024 sales and EPS implies year-over-year growth of 7.7% and 29.4%, respectively. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 4 cents and 7 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for NSANY’s fiscal 2024 EPS implies year-over-year growth of 12.6%. The earnings estimate for fiscal 2024 and 2025 has been revised upward by 10 cents and 3 cents, respectively, in the past 30 days.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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