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Harley-Davidson's (HOG) Q4 Earnings Breeze Past Estimates

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Harley-Davidson, Inc. (HOG - Free Report) reported fourth-quarter 2022 adjusted earnings of 28 cents per share, beating the Zacks Consensus Estimate of 3 cents. Higher-than-anticipated revenues from the Motorcycles & Related Products and Financial Services segments resulted in this outperformance. The bottom line also shot up 100% from the 14 cents per share reported in the year-ago quarter.

The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1,142 million, up 12% from the year-earlier quarter.

Harley-Davidson, Inc. Price, Consensus and EPS Surprise


Harley-Davidson, Inc. Price, Consensus and EPS Surprise

Harley-Davidson, Inc. price-consensus-eps-surprise-chart | Harley-Davidson, Inc. Quote


Segmental Highlights

Harley-Davidson Motor Company: Total revenues from the motorcycle and related products segment, which constitute the bulk of the firm’s overall revenues, increased 14% on a year-over-year basis and came in at $919 million. The figure also outpaced the consensus mark of $868 million. The operating loss from the segment narrowed to $32 million from $82 million incurred in the corresponding quarter of 2021. The reported amount was also narrower than the Zacks Consensus Estimate of $69 million.

In the quarter under review, revenues from the sale of motorcycles came in at $666 million, rising 23% year over year and crossing the consensus mark of $588 million. The company’s global shipments came in at 34,000 motorcycles, up 18%.

During the reported quarter, Harley-Davidson retailed 33,800 motorcycle units globally, flat year over year. Its retail motorcycle units sold in North America declined 2% to 19,200. Meanwhile, sales in Latin America decreased 46%, while that in Asia Pacific and EMEA (Europe, Middle East and Africa) increased 11% and 1%, respectively.

Revenues for parts & accessories were down 8% from a year ago to $151 million and missed the consensus mark of $172 million. Revenues from apparel remained the same as the prior-year quarter at $73 million and lagged the consensus mark of $77 million.

Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $214 million, up 7% year over year and crossed the consensus mark of $182 million. Operating income declined 32% to $64 million and missed the consensus mark of $74 million.

LiveWire: During the reported quarter, the total shipment for LiveWire was 69 units, down 63% compared with Q4, 2021. Revenue declined by 28% to $9 million and the operating loss widened from $20 million to $29 million.

Financial Position

In the fourth quarter, selling, general and administrative expenses from the HDMC unit increased 15.5% to $275.9 million from $238.9 million in the year-ago quarter.

The firm generated $548.5 million of cash from operating activities. The company paid dividends of 15.75 cents per share in the reported quarter.

Harley-Davidson had cash and cash equivalents of $1.4 billion as of Dec 31, 2022, down from $1.8 billion as of Dec 31, 2021. In the same period, the long-term debt decreased to $4,457 million from $4,595.6 million recorded on Dec 31, 2021.

2023 Guidance

For 2023, the company expects revenues from the motorcycles segment to grow in the band of 4%-7%. The operating income margin expectation for the motorcycles segment is in the range of 14.1% to 14.6%. HOG expects its operating income for Financial Services to decline by 20-25%. For the LiveWire segment, the motorcycle wholesale units are expected to be in the range of 750–2,000 and the operating loss for the segment is expected to be in the range of $115 - $125 million. Capital expenditure projection for the full year is estimated to be in the range of $225-$250 million.

Zacks Rank & Other Key Picks

Harley-Davidson currently carries a Zacks Rank #2 (Buy).

A few other top-ranked players in the same industry are Renault (RNLSY - Free Report) and Mercedes-Benz (MBGAF - Free Report) , both sporting a Zacks Rank #1 (Strong Buy).

Renault designs, manufactures, markets and repairs vehicles. It primarily offers passenger cars and light commercial vehicles; electric vehicles; sports vehicles and power train components. The Zacks Consensus Estimate for RNLSY’s 2023 earnings implies year-over-year growth of 193.01%.

Mercedes-Benz develops, manufactures, and sells passenger cars comprising premium and luxury vehicles of the Mercedes-Benz brand. The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 3.75%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

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