Harley-Davidson third-quarter profit falls, stock hits two-year low
By Meredith Davis
(Reuters) - Motorcycle manufacturer Harley-Davidson Inc. (HOG.N: Quote) on Tuesday posted lower quarterly earnings, reduced profit guidance and said it planned to eliminate jobs, sending the company's shares to a two-year low.
"The marketplace has thrown us some curveballs this year,"chief executive Matt Levatich, said after the company reported weaker sales and earnings that fell below analysts' guidance.
Harley-Davidson said it plans to incur a one-time charge of $30 million to $35 million in the fourth quarter for a reorganization and job cuts which would increase funding for marketing and product redevelopment.
The company's shares plummeted nearly 15 percent to their lowest since June 2013, as its earnings fell below analysts' forecasts.
Harley-Davidson also cut its 2015 operating profit margin to 16 percent to 17 percent for the motorcycles segment from 18 percent to 19 percent.
"We faced our own headwinds including limited product availability and voluntary recalls, Levatich said.
After experiencing two recalls in the middle of the quarter the company has seen $32 million in recall expenses so far this year, company executives said on the conference call.
Harley-Davidson is traditionally a market leader is the United States, but with domestic sales lagging the company has lost market share as foreign competitors lowered prices to entice new buyers. The company's U.S. market share fell by 3.9 percentage points to 52.4 percent in the third quarter compared with a year ago. Continued...