Motorcycle giant
Harley-Davidson
reported better-than-expected fourth-quarter earnings on Thursday. The stock was falling anyway. Guidance for 2024 came up short.
Harley reported quarterly earnings per share of 18 cents from sales of $1.1 billion. Wall Street was looking for 4 cents and $900 million, respectively, according to FactSet.
It’s a top and bottom line beat, but guidance for 2024 disappointed. Harley expects a 2024 operating profit between $675 million and $800 million. That’s a wide range that includes guidance for motorcycles, financial services, as well as
LiveWire,
Harley’s electric motorcycle business. The midpoint, at about $740 million, compares to Wall Street projections of $783 million.
Harley reported a 2023 operating profit of just under $780 million, down from $909 million reported in 2022.
Harley shares had been lower but have turned around, rising 1.3% to $35, while the
S&P 500
was flat and the
Nasdaq Composite
was up 0.2%. One reason for the reaction is the starting point. Coming into Thursday trading, Harley stock has been badly beaten up, off about 30% over the past 12 months.
LiveWire stock was down 1.7% at $10.51.
Citi analyst James Hardiman wrote Thursday that motorcycle prices were weaker than expected, but added the “wide-ranging” guidance “appears in line” with what investors were looking for.
“In the third year of our Hardwire strategy we have made progress in key elements of our strategic plan,” said CEO Jochen Zeitz in a news release. The five-year Hardwire plan, announced in 2021, is designed to improve profitability by investing in Harley’s core segments of Touring, large Cruiser, and Trike bikes while bringing new customers into Harley products.
“We are excited by the early read of our new Model Year launch,” added Zeitz. It’s “the most comprehensive product development in the touring platform in well over 10 years, that will redefine the Harley-Davidson Grand American Touring experience for years to come and lay the foundation to drive retail sales growth in 2024.”
Wall Street doesn’t project sales growth for 2024. Analysts project motorcycle revenue of $3.7 billion, down from about $3.9 billion in 2023. Investors will have to wait to see how things turn out.
Write to Al Root at [email protected]
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