Harley beats expectations despite dollar, pricing headwinds
By Meredith Davis
CHICAGO (Reuters) - Harley-Davidson Inc (HOG.N: Quote) beat Wall Street profit and sales expectations on Tuesday despite headwinds from a strong U.S. dollar and steep discounts by rivals, sending shares up 4 percent.
The company cited strong demand for new models and a rebound in U.S. sales late in the quarter. Harley also said it will not lower prices on its iconic motorcycles and that a recent drop in its share price warrant ramping up a share buyback.
The stock jumped $2.21 to $57.13, but remains well below its Dec. 2014 52-week high of $70.41.
"We will not meet discounting with discounting. We will not be putting tags on our motorcycles. That is certainly the easiest way to address some of the competitiveness we are experiencing in the United States," CFO John Olin said on a conference call.
The company beat analysts' expectations, reporting net income of $299.8 million, or $1.44 per share, in the second quarter, down 15 percent from $354.2 million or $1.62 share a year earlier.
Analysts had expected earnings per share of $1.39.
Total revenue fell to $1.82 billion from $2 billion a year ago. Analysts had expected $1.67 billion.
Harley-Davidson's worldwide retail motorcycle sales fell to 88,931 in the second quarter, from 90,218 a year ago. Continued...