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Harley-Davidson (HOG) Q4 Earnings Beat Estimates, Fall Y/Y
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Harley-Davidson, Inc. (HOG - Free Report) reported fourth-quarter 2023 adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate of 4 cents but fell 35.7% year over year. The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1.05 billion, down 8% from the prior-year quarter.
Harley-Davidson, Inc. Price, Consensus and EPS Surprise
Harley-Davidson Motor Company: Total revenues from the Motorcycle and Related Products segment, constituting the bulk of the firm’s overall revenues, decreased 14% on a year-over-year basis to $792 million and missed our forecast of $937.5 million on lower-than-expected motorcycle shipments. The operating loss for the segment widened to $44 million from $32 million in the corresponding quarter of 2022.
In the quarter under review, revenues from the sale of motorcycles came in at $583 million, down 13% year over year. The company’s global shipments were 29,500 motorcycles, which declined 13% and missed our projection of 32,688 units.
During the reported quarter, Harley-Davidson retailed 30,200 motorcycle units globally, down 11% year over year. Its retail motorcycle units sold in North America decreased 9% to 17,500. Sales in EMEA and Asia Pacific declined 22% and 10%, respectively, whereas sales in Latin America rose 46% on a year-over-year basis.
Revenues for parts & accessories declined 14% from a year ago to $130 million and missed our estimate of $160.2 million. Revenues from apparel tailed off 21% year over year to $57 million and missed our projection of $80.5 million.
Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $246 million, which increased 15% year over year and exceeded our forecast of $193.2 million. Operating income declined 10% to $58 million and missed our estimate of $64.3 million.
LiveWire: During the reported quarter, the total shipment for LiveWire was 514 units, up 645% compared with the year-ago quarter. Revenues rose 67% to $15 million and exceeded our estimate of $11.3 million. Operating loss widened from $29 million to $35 million, which is narrower than our projection of $42.2 million.
Financial Position
In the fourth quarter, selling, general and administrative expenses from the HDMC unit declined to $225.5 million from $275.8 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 $1.53 billion as of Dec 31, 2023, up from $1.43 billion as of Dec 31, 2022. In the same period, long-term debt increased to $4.99 billion from $4.46 million recorded on Dec 31, 2022.
2024 Guidance
For 2024, the company expects revenues from HDMC to be flat to down 9%. The operating income margin expectation for the segment is in the range of 12.6% to 13.6%. HOG expects its operating income for Financial Services to remain flat to up 5%. For the LiveWire segment, motorcycle wholesale units are expected in the range of 1,000-1,500. Operating loss for the segment is anticipated in the range of $115-$125 million. Capital expenditure projection for the full year is in the range of $225-$250 million.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The earnings per share (EPS) estimates for 2024 and 2025 have improved 22 cents each in the past seven days.
The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 5.8%. The EPS estimates for 2023 and 2024 have moved up by a penny and 30 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.
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Harley-Davidson (HOG) Q4 Earnings Beat Estimates, Fall Y/Y
Harley-Davidson, Inc. (HOG - Free Report) reported fourth-quarter 2023 adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate of 4 cents but fell 35.7% year over year. The motorcycle manufacturer generated consolidated revenues (including motorcycle sales and financial services revenues) of $1.05 billion, down 8% from the prior-year quarter.
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, constituting the bulk of the firm’s overall revenues, decreased 14% on a year-over-year basis to $792 million and missed our forecast of $937.5 million on lower-than-expected motorcycle shipments. The operating loss for the segment widened to $44 million from $32 million in the corresponding quarter of 2022.
In the quarter under review, revenues from the sale of motorcycles came in at $583 million, down 13% year over year. The company’s global shipments were 29,500 motorcycles, which declined 13% and missed our projection of 32,688 units.
During the reported quarter, Harley-Davidson retailed 30,200 motorcycle units globally, down 11% year over year. Its retail motorcycle units sold in North America decreased 9% to 17,500. Sales in EMEA and Asia Pacific declined 22% and 10%, respectively, whereas sales in Latin America rose 46% on a year-over-year basis.
Revenues for parts & accessories declined 14% from a year ago to $130 million and missed our estimate of $160.2 million. Revenues from apparel tailed off 21% year over year to $57 million and missed our projection of $80.5 million.
Harley-Davidson Financial Services: Revenues for Harley-Davidson Financial Services totaled $246 million, which increased 15% year over year and exceeded our forecast of $193.2 million. Operating income declined 10% to $58 million and missed our estimate of $64.3 million.
LiveWire: During the reported quarter, the total shipment for LiveWire was 514 units, up 645% compared with the year-ago quarter. Revenues rose 67% to $15 million and exceeded our estimate of $11.3 million. Operating loss widened from $29 million to $35 million, which is narrower than our projection of $42.2 million.
Financial Position
In the fourth quarter, selling, general and administrative expenses from the HDMC unit declined to $225.5 million from $275.8 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 $1.53 billion as of Dec 31, 2023, up from $1.43 billion as of Dec 31, 2022. In the same period, long-term debt increased to $4.99 billion from $4.46 million recorded on Dec 31, 2022.
2024 Guidance
For 2024, the company expects revenues from HDMC to be flat to down 9%. The operating income margin expectation for the segment is in the range of 12.6% to 13.6%. HOG expects its operating income for Financial Services to remain flat to up 5%. For the LiveWire segment, motorcycle wholesale units are expected in the range of 1,000-1,500. Operating loss for the segment is anticipated in the range of $115-$125 million. Capital expenditure projection for the full year is in the range of $225-$250 million.
Zacks Rank & Key Picks
HOG currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Modine Manufacturing Company (MOD - Free Report) , Mercedes-Benz Group AG (MBGAF - Free Report) and Oshkosh Corporation (OSK - Free Report) . MOD sports a Zacks Rank #1 (Strong Buy), while MBGAF & OSK carry Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The earnings per share (EPS) estimates for 2024 and 2025 have improved 22 cents each in the past seven days.
The Zacks Consensus Estimate for MBGAF’s 2023 sales implies year-over-year growth of 5.8%. The EPS estimates for 2023 and 2024 have moved up by a penny and 30 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.