Harley-Davidson, Inc. (HOG - Free Report) reported earnings per share of 22 cents in fourth-quarter 2019, surpassing the Zacks Consensus Estimate of 5 cents and increasing from 17 cents per share in the prior-year period. This outperformance resulted from higher-than-expected motorcycle sales in the Asia Pacific region. Precisely, retail motorcycle sales in the Asia-Pacific region totaled 7,691 units, topping the consensus mark of 7,348 units.
The company’s net income amounted to $13.5 million compared with the year-ago quarter’s $495,000.
Total revenues from Motorcycle and Related products, which form bulk of overall revenues of the firm, declined 8.5% year over year to $874.1million in the reported quarter. The top line also missed the Zacks Consensus Estimate of $930 million. The company reported consolidated revenues (including motorcycle sales and financial services revenues) of $1.07 billion, declining6.5% year over year.
Segmental Highlights
Motorcycles and Related Products: In the fourth quarter, operating loss from the Motorcycles and Related Products segment amounted to $46.4 million, narrower than a loss of $59.5 million reported in the year-ago period. Higher sales from the Asia-Pacific region and lower operating costs from the company's manufacturing-optimization initiativecan be attributed to the same.
In the quarter ended Dec 31, 2019, it shipped 40,454 motorcycles, down 7% year over year.
Harley-Davidson’s worldwide retail motorcycle units sold edged down 1.4% to 38,754 from 39,311 in the year-ago quarter. Harley-Davidson’s retail motorcycle units sold in the United States also declined 3.1% from the year-ago quarter to 20,204. International units sold increased 0.5% to 18,550 motorcycles from 18,462 in the prior-year quarter. Sales in the Middle East and Africa, Canada and Latin America declined 2.3%, 14.1% and 0.1%, respectively. Nonetheless, in the Asia Pacific, sales increased 6.2% from the year-ago period.
Revenues for Parts & Accessories fell 9.1% from a year ago to $129.3 million. The same for General Merchandise — including Motor Clothes apparel and accessories — declined 2.2% from the prior-year quarter to $57.2 million.
Financial Services: Revenues for Harley-Davidson Financial Services increased to $198.2 million from the prior-year quarter’s $190.2 million. However, operating income declined 7% to $58.8 million from $63.3 million in the year-ago quarter.
Financial Position
Harley-Davidson had cash and cash equivalents of 833.8 million as of Dec 31, 2019. Net long-term debt increased to $5,124 million from $4,887 million in the year-ago period.Its debt-to capital ratio was 74% at the end of the quarter.
During the year, the American motorcycle maker bought back $286.7 million shares and hiked payout by 1.4% to $1.50 per share.
As of Dec 31, 2019, the company’s net operating cash inflow was $868.3 million compared with $1,206 million on Dec 31, 2018. Capital expenditure in 2019 was $181.4 million compared with $213.5 million recorded in 2018.
Looking Forward
For full-year 2020, Harley-Davidson projects Motorcycle segment revenues in the band of $4.53-$4.66 billion. For first-quarter 2020, it expects Motorcycle segment revenues within $1.09-$1.17 billion.
The motorcycles segment operating margin, as a percentage of revenues, is expected in the band of 7-8% for the full year. Operating income from the Financial Services segment is expected to be flat year over year. Capex is projected between $215 million and $235 million.
Zacks Rank and Key Picks
Harley Davison currently carries a Zacks Rank #4 (Sell). The stock has depreciated 9.5% against the industry’s rally of 34.2% over the past year.
Some better-ranked stocks in the Auto-Tires-Trucks sector include Gentex Corporation (GNTX - Free Report) , Tesla, Inc. (TSLA - Free Report) and SPX Corporation (SPXC - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Gentex has an estimated earnings growth rate of 7.3% for 2020. The company’s shares have appreciated 34.6% in a year’s time.
Tesla has a projected earnings growth rate of 6,460% for the current year. Its shares have surged 87.6% over the past year.
SPX has an expected earnings growth rate of 8.1% for the current year. The stock has rallied 74% in the past year.
5 Stocks Set to Double
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Zacks Names "Single Best Pick to Double"
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Harley-Davidson, Inc. (HOG - Free Report) reported earnings per share of 22 cents in fourth-quarter 2019, surpassing the Zacks Consensus Estimate of 5 cents and increasing from 17 cents per share in the prior-year period. This outperformance resulted from higher-than-expected motorcycle sales in the Asia Pacific region. Precisely, retail motorcycle sales in the Asia-Pacific region totaled 7,691 units, topping the consensus mark of 7,348 units.
The company’s net income amounted to $13.5 million compared with the year-ago quarter’s $495,000.
Total revenues from Motorcycle and Related products, which form bulk of overall revenues of the firm, declined 8.5% year over year to $874.1million in the reported quarter. The top line also missed the Zacks Consensus Estimate of $930 million. The company reported consolidated revenues (including motorcycle sales and financial services revenues) of $1.07 billion, declining6.5% year over year.
Segmental Highlights
Motorcycles and Related Products: In the fourth quarter, operating loss from the Motorcycles and Related Products segment amounted to $46.4 million, narrower than a loss of $59.5 million reported in the year-ago period. Higher sales from the Asia-Pacific region and lower operating costs from the company's manufacturing-optimization initiativecan be attributed to the same.
In the quarter ended Dec 31, 2019, it shipped 40,454 motorcycles, down 7% year over year.
Harley-Davidson’s worldwide retail motorcycle units sold edged down 1.4% to 38,754 from 39,311 in the year-ago quarter. Harley-Davidson’s retail motorcycle units sold in the United States also declined 3.1% from the year-ago quarter to 20,204. International units sold increased 0.5% to 18,550 motorcycles from 18,462 in the prior-year quarter. Sales in the Middle East and Africa, Canada and Latin America declined 2.3%, 14.1% and 0.1%, respectively. Nonetheless, in the Asia Pacific, sales increased 6.2% from the year-ago period.
Revenues for Parts & Accessories fell 9.1% from a year ago to $129.3 million. The same for General Merchandise — including Motor Clothes apparel and accessories — declined 2.2% from the prior-year quarter to $57.2 million.
Financial Services: Revenues for Harley-Davidson Financial Services increased to $198.2 million from the prior-year quarter’s $190.2 million. However, operating income declined 7% to $58.8 million from $63.3 million in the year-ago quarter.
Financial Position
Harley-Davidson had cash and cash equivalents of 833.8 million as of Dec 31, 2019. Net long-term debt increased to $5,124 million from $4,887 million in the year-ago period.Its debt-to capital ratio was 74% at the end of the quarter.
During the year, the American motorcycle maker bought back $286.7 million shares and hiked payout by 1.4% to $1.50 per share.
As of Dec 31, 2019, the company’s net operating cash inflow was $868.3 million compared with $1,206 million on Dec 31, 2018. Capital expenditure in 2019 was $181.4 million compared with $213.5 million recorded in 2018.
Looking Forward
For full-year 2020, Harley-Davidson projects Motorcycle segment revenues in the band of $4.53-$4.66 billion. For first-quarter 2020, it expects Motorcycle segment revenues within $1.09-$1.17 billion.
The motorcycles segment operating margin, as a percentage of revenues, is expected in the band of 7-8% for the full year. Operating income from the Financial Services segment is expected to be flat year over year. Capex is projected between $215 million and $235 million.
Zacks Rank and Key Picks
Harley Davison currently carries a Zacks Rank #4 (Sell). The stock has depreciated 9.5% against the industry’s rally of 34.2% over the past year.
Some better-ranked stocks in the Auto-Tires-Trucks sector include Gentex Corporation (GNTX - Free Report) , Tesla, Inc. (TSLA - Free Report) and SPX Corporation (SPXC - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Gentex has an estimated earnings growth rate of 7.3% for 2020. The company’s shares have appreciated 34.6% in a year’s time.
Tesla has a projected earnings growth rate of 6,460% for the current year. Its shares have surged 87.6% over the past year.
SPX has an expected earnings growth rate of 8.1% for the current year. The stock has rallied 74% in the past year.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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