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[searay540]

UPDATE:Harley Davidson Reviews Finance Unit; 2Q Down 91%
Article Comments more in Business »
DETROIT (Dow Jones)--Harley Davidson Inc. (HOG) said Thursday that it is reviewing "strategic options" for its loss-making finance arm as the motorcycle maker rolled out another round of job and production cuts.

The U.S. company doesn't plan to split the finance unit, despite potential regulatory pressure on non-bank consumer lenders.

Harley Davidson Financial Services, or HDFS, once a key profit center, has become a drag on the company amid double-digit falls in motorcycle demand that led to a 91% drop in second-quarter profits.

HDFS is "clearly a strategic asset, ...

[Indenial]

Joined: 13 Jul 2003
Posts: 29174
 HD news
UPDATE 2-Harley net tumbles 91 pct as bike sales slide
Thu Jul 16, 2009 7:25am EDT
(Updates with estimates, details on charges; changes dateline from NEW YORK)

* Q2 shr $0.08 vs $0.95

* Q2 net revenue $1.15 bln vs $1.57 bln

* Lowering shipments, cutting workforce

CHICAGO, July 16 (Reuters) - U.S. motorcycle maker Harley-Davidson Inc said on Thursday that its profit fell sharply in most recent quarter as the ugly economic environment soured consumer spending and sent bike sales sliding.

The company also slashed its 2009 shipment forecast, announced plans to accelerate plant consolidation and said it would cut another 1,000 jobs -- moves it said would add another $40 million in one-time restructuring charges.

Harley-Davidson reported a second-quarter profit of $19.8 million, or 8 cents a share, down 91 percent from the $222.8 million, or 95 cents a share, it booked a year before.

Retail sales of new Harleys skidded 30.1 percent and revenue fell to $1.15 billion from $1.57 billion. Analysts were expecting $1.14 billion.

In the United States, the company's biggest market, retail sales of the company's bikes tumbled 35.1 percent from the year-ago period.

Harley slashed its 2009 shipment expectation to between 212,000 and 228,000 new motorcycles, down from the 303,479 it shipped in 2008. It had previously said it expected to ship 264,000 to 273,000 motorcycles this year.

As a result of the lowered shipment volume, the company said it would cut 700 more positions in its hourly workforce and slash the salaried workforce by about 300 positions. It said it plans to offer a voluntary separation incentive package to eligible salaried employees.

It had already announced cuts of 1,400 to 1,500 hourly production positions in 2009 and 2010 and about 300 salaried positions.

On average, analysts had expected the Milwaukee-based company to report a profit of 25 cents a share, according to Reuters Estimates, which said the company probably earned 24 cents per share on a basis comparable with the estimates, taking into account restructuring and goodwill charges.

Harley said it had reclassified a $72.7 million noncash provision to establish an initial credit loss allowance and a $28.4 million impairment charge to write off the goodwill recorded in connection with the 1995 purchase of its finance unit, HDFS. (Reporting by James Kelleher and Christopher Kaufman, editing by Gerald E. McCormick)
 

[mrmagloo]

...and the stock price surges?

[CVOJOE]

Same song, different verse...........not good.

Harley-Davidson makes deeper cuts as 2nd-qtr income falls 91 percent on lower bike shipments
By: Dan Strumpf, AP Auto Writer
NEW YORK (AP) -- Harley-Davidson Inc. said Thursday it is cutting 1,000 more employees and lowering its motorcycle shipment guidance as quarterly earnings continued to fall due to weaker sales.The Milwaukee-based maker of the famous heavyweight motorcycles said it plans to cut another 700 hourly and 300 salaried employees from its ranks as it copes with falling demand for its high-end bikes.

"It is obviously a very tough environment for us right now, given the continued weak consumer spending in the overall economy for discretionary purchases," Harley-Davidson President and CEO Keith Wandell said in a statement. Harley, the top seller of heavyweight motorcycles, said its second-quarter income fell 91 percent to $19.8 million, or 8 cents per share. That's down from $222.8 million, or 95 cents per share, in the same period last year.
Revenue declined 27 percent to $1.15 billion from $1.57 billion a year ago. Analysts surveyed by Thomson Reuters forecast 24 cents per share on revenue of $1.15 billion. Its shares rose 31 cents, or 1.8 percent, to $17.80 in morning trading.

Harley has been restructuring since the beginning of the year as it sought to cope with weaker sales. Demand for Harley's motorcycles, which can run $20,000 or more, have taken a pounding in the recession as consumers pull back on discretionary spending. Earlier this year, the company had said it planned to cut between 1,400 and 1,500 hourly positions and about 300 salaried positions.

In May, the company said it was weighing its options for its main motorcycle assembly plant in York, Pa. The operations at the facility aren't competitive, the company said, and a study remains under way to assess whether production will remain in York or move to another U.S. site. It said Thursday it expects to make a decision by the end of the year.

Harley said its worldwide motorcycle sales fell 30 percent during the quarter. That was still better than the industry wide decline in heavyweight motorcycle sales of 48 percent. Harley now expects to ship between 212,000 and 228,000 motorcycles to its dealers and distributors worldwide in 2009, down between 25 to 30 percent from 2008 shipments levels.

Previously, the company expected to ship between 264,000 and 273,000 motorcycles. In the third quarter, it expects to ship between 52,000 and 57,000 bikes. The company is cutting production to meet reduced demand. It said Thursday it will implement production shutdowns at its York and Kansas City, Mo., production facilities, as well as at its power train operations at Menomonee Falls and Wauwatosa, Wis.

The company's financing arm, Harley-Davidson Financial Services, posted an operating loss of $62.1 million in the second quarter, down from operating income of $37.1 million a year ago. The tight credit markets have weighed on the unit, which has been heavily reliant on the battered securitization market for funding.
Shares of Harley-Davidson closed Wednesday at $17.49.

The stock has fluctuated between $7.99 and $48.05 in the last 52 weeks.

[spydglide]

...and the stock price surges?

...and right or wrong I took advantage of the 'surge' and now don't own any HOG for the 1st time in many years.    spyder

[sadunbar]

...and the stock price surges?

I can think of many a company that would be happy to have the bad news be a 19 million quarterly profit...especially if their product relies on discretionary spending.  And reducing costs and capacity to meet demand is exactly what investors expect the management to do.  Very sad for the affected employees, but good news for an investor.  I am sitting tight on the 2000 shares I bought at 8.77 a few months back...  Harley will survive...

[jimp]

Anyone that taps the private market for 15% money has hidden financial problems.

[bandit]

Today in a swiss newspaper, they write about
1000 jobs that will leave HD as a result of Q2.

Bandit

 

for those of you capable of reading german,
attached picture.