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Zacks Projects Harley 2nd Quarter Profits Up

Friday, July 16, 2010
Harley Davidson Motorcycles
Harley-Davidson's 2010 Second Quarter Results won't be out until next week, but Zacks Consensus Estimate project a profit of $0.42 per-share, up from $0.29 per-share reported in H-D's 2010 First Quarter Results.
On the cusp of Harley-Davidson releasing its 2010 Second Quarter results, preliminary signs bode well for the American motorcycle manufacturer. For the second quarter of 2010, projections approximate a profit of $0.42 per-share and reflect an annualized growth of 56%, according to Zacks Consensus Estimate. In comparison, Harley-Davidson’s first-quarter 2010 income from continuing operations was $0.29 per-share, which was three cents more than Zacks Consensus Estimate.

Should these results hold true, Harley-Davidson will have outdone Zacks Consensus Estimate over the last four quarters. The Motor Company has aggressively pursued means of righting a listing ship. It has gone about this by closing down its Buell operations, divesting the recently acquired MV Agusta, and reducing its workforce. Its Financial Services returned to profitability in the first quarter of 2010, driven by improved credit performance in the retail motorcycle loan portfolio and by a lower cost of funds.

In the last month, two of 12 analysts covering the stock have revised the estimates for H-D upward based on a better retail sales trend that’s been driven by a shortage in inventory. Harley anticipated shipping 201,000–212,000 motorcycles worldwide in 2010, a reduction of 5%–10% from 2009 totals. In that same time frame, one analyst made a downward revision in estimates for 2010 basing their decision on “the company’s gloomy outlook for worldwide motorcycle shipments.” This despite only a 2.8% decline in Harley-Davidson’s retail sales in the international market in the first quarter of 2010 and the recent opening of the first Harley-Davidson dealerships in India.

Harley-Davidson will release its 2010 second quarter results before the market opens on July 20, 2010.

About Zacks Consensus Estimates (courtesy of Zacks Investment Research):

For any given stock there may be from 1 to 40 brokerage analysts following the company and making EPS estimates. For more than 25 years, Zacks has been tracking these individual sell-side analyst estimates and creating consensus EPS estimates. The consensus estimate is the average of all the current estimates made available by brokerage analysts. Consensus estimates are more advantageous because they reduce the risk of any single analyst making an incorrect forecast.

Zacks Consensus Estimate = the average of all current EPS estimates

Zacks calculates a consensus estimate for the current quarter, the next quarter, the current fiscal year, the next fiscal year, and as a long-term growth rate. These consensus estimates are the benchmark by which the company will be judged by the investment community. A company can:

Meet - report the same earnings as forecast
Beat - report better earnings than forecast
Miss - report worse earnings than forecast

Missing a forecast is the most dreaded outcome, since it suggests that a company is not performing as well as investors thought. A stock's price will often tumble in response to an earnings miss.
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Comments
Zippy -good news foe Victory also  July 20, 2010 08:56 PM
In the interset of full disclosure.

Victory sales for the quarter increased more than 10 percent in North America from the comparable quarter last year.
Zippy -Read it and ...  July 20, 2010 07:55 AM
MILWAUKEE (July 20, 2010) - Harley-Davidson, Inc. (NYSE: HOG) reported second-quarter 2010 income from continuing operations of $139.3 million, or $0.59 per share, compared to income of $33.4 million and earnings per share of $0.14 from continuing operations in the year-ago quarter. Second-quarter 2010 results include operating income from Financial Services of $60.8 million. Revenue from Motorcycles and Related Products was $1.14 billion in the second quarter.
Zippy -sometimes, not always  July 19, 2010 08:48 PM
It is easy to build a balancing stand. There was a how to in "The Horse, backstreet choppers" last month. And since I lace my own wheels, it is not that tough.

Anyway, HD releases erning early on Tuesday 7/20. That was the focus of the article.

We will see who is selling bikes and making money.

I will finish with a tale of bikeweek.

Last March I was riding to Daytona, I could see a HD dealer from the Highway. There were throwing a huge party in the parking lot. Bands, beers, swap meet, bikini bikewash. You get the idea. I did not stop, I ride a metric, but it was good to see a dealer showing his customers a good time.

On the way home I took a different route to pass the huge MEGAMETRIC dealer. Surely they would be having a grand old time to celebrate bikeweek. Problem was they closed both locations (converted car lots) a few months back. I guess selling Suzuki, Honda, Triumph, Victory and Ducati all at the same time could not keep them in business. Mostly a buncha punk kids worked there who shoved credit aps in your face when you walked in. They all ride 600 sport bikes.

Say what you want, HD sell bikes, thier sales people ride a lot and I am going to drop 20 large on a big bike to ride to Sturgis there will be a salesman who has done the trip. Not just some bonehead who hangs out the bikenight Hooters.

Ride safe.

gb -good for you zippy  July 19, 2010 06:50 PM
do you balance them too? how?
Zippy -to GB  July 19, 2010 05:44 PM
Gb, you take your bike to the shop for tire changes? No one touches my bikes, I change my own tires.
Zippy -I never stated I own an HD.  July 19, 2010 05:41 PM
My claim is that the only 2 style of cruisers sell well. HD and one that look like HD. I do not own an HD. I have a RoadStar based custom bagger, great machine. Looks awesome with the FLH fenders on it. Roadking comes out in early 90s, huge seller. Roadstar comes out in late 90s. Makes you go hmmm. I picked it up for 1/3 of what I would have paid for a King at the time. I build my own bikes from wrecks and abandoned projects. My V Star based bobber has a Fatboy frontend.

This article is about the MC business and who is making a profit. The only reason Victory is even still around is because they rushed out some models to get in on the StreetGlide/Batwing craze HD Started. Victory is hanging on with a few % of the total market. Howe long Polaris keeps them afloat is yet to be seen.

You can attack and insult, no worries I can handle it. What you can not do is show me a MC company showing sales growth building HD clones. My company that builds products to make your metric look like an HD is doing fine.

Everybody is hurting in these crazy times. The strong survive. %50-60 of all dealers are gone in some areas of all brands.

I don't care what you ride or why you ride it. It is not about you, or me. This is business, not personal.
Mike in WV -Zippy  July 19, 2010 07:39 AM
Unfortunately for you Zippy, your HD defines who you are as a person and not the other way around. You are one of the many droids out there who look at HD as a status symbol and not just a bike. It cracks me up when Harley owners have to interject the word "Harley" for "Bike"...mostly when there are others around they think will be impressed when they hear the word Harley. lol Instead of saying hey, let's hop on the "bikes" and take a weekend ride, they say let's take the "Harleys". Those of you who have used "Harley" to try to impress someone...lol...you know who you are and now you know the rest of us think you're lame. Having owned HD's as well as several other manufacturers, I can say first hand that the HD offered nothing more as a bike than any other bike...but they got wicked skills in the marketing area. When I got rid of my HD's, I got rid of all the propaganda too...but I did keep my boots (they're made by Wolverine afterall lol). My point is this Zippy, anyone who would make such a claim that there are only two types of riders...Harley and those who want a Harley, is as moronic as "Milwaukee Mike". Your perceived envy of others is grossly overinflated. I ride a Victory Cross Country...I've had 3 Victorys and love them. I wouldn't care where they were made...the quality is superb and HD can't touch their HP and torque. Try this out...look on ebay to see how many Cross Country's are for sale versus Street Glides, RK's, Road Glides or Ultras...People love their Victories and aren't interested in selling them.
gb -zippy  July 19, 2010 05:25 AM
i ride a Victory, hardly a HD clone and have never wanted a HD. if that's what you want great. bikes are an emotional buy, love what ya ride and ride what ya love. to simply say everyone wants a HD someday is pretty stupid. i came from an inline 4 and wanted an V twin and there were imho 2 choices, HD and Victory. test rode them both and the Victory blew the HD away. after 65,000 miles and never having the bike in the shop except to change tires i think i made the right choice for me. plus at bike night and can find my Vegas in the sea of HD look a likes.
Zippy -look like HD  July 18, 2010 02:56 AM
Well, the only real way to make big sales in the cruiser market is to make your bike look like a Harley. "Classicly" styled bikes sell much better than all this neo/streamline stuff.

Look at the Star Roadliner/Stratoliner bikes. Amazing machines, aluminum chasis, stump pulling motors. "Neo/Retro/deco" styling The term "Madonna bra blinkers" was coined by the MC press because of this bike. Horrible sellers. (quick, throw a batwing on one, maybe someone will buy it) Put the technically superior Suzy 109 line (lets name out entire cruiser line in cubic inches so folks will thin of HD when they say it) in this same group.

I want to update from my classic styled, and very well selling Roadstar. What are my choices? The aforementioned Stratoliner or a Venture that literally has bolt on, fake cooling fins to make the motor look like an HD.

Guess I ain't buying a new Star anytime soon.

Look at the new Honda Shadow RS 750 v twin. Every single article about this bike I have read talks about how it looks just like a Sporty.

Do you know anyone who rides a 250 cruiser? Lots of them out there with dust on them at the dealer. Either you have an HD or you want an HD.
Matt -Zippy (types of cruiser owners)  July 18, 2010 12:19 AM
I understand your theory about cruisers being impractical vehicles so why would anyone buy one for practical reasons and I partially agree with That. However to insist that everyone that rides or wants to ride a cruiser automatically wants a Harley I don't believe is entirely accurate considering that many cruiser riders not only care about looks,sound, and country of assembly but also feel passionate about performance,handling, and yes even technology/innovation as well. I realize a lot of cruiser purists may scoff or dismiss that notion but I guess my point is not all riders are as "traditional" in their idea of what their "ideal" cruiser is. And yes I have had Harleys among other bikes adorning my desktop before. Some H-D's are nice to look at and fun to ride but to be honest personally I have no desire to own any of them.
Zippy, -Not exactly true..  July 17, 2010 03:26 PM
Jap bikes (cruisers/sport) are very generic. We all remeber the UMJ (universal Japanese Motorcycle) of the 70s-80s. Form 10 feet away you can hardly tell the difference.

Triumph, BMW and Harley are showing sales growth in these hard times. Hardly cheep (sic) bikes.

Bikes are emotional items, we covet them for months before buying. Click that little flat bar up in the upper right corner, look at your screen saver. Good chance it is a bike your saving for or drooling over!

We work and save and wait and buy the bike we want, not the bike we need. There are really only 2 types of cruiser owners. Those who ride Harleys and those who want Harleys!

...as far a reliable. I once took apart carbs on a new V Star 1100 to jet it and figure out why it ran crappy. It was missing pieces from the factory!!
Bob -They do...  July 17, 2010 10:38 AM
buy Harleys because they want Harleys. My dad's 17 year old Heritage broke down on him twice in the first 2 days on his trip to Alaska. So he bought an Ultra Classic to finish his trip. He won't ride anything else as there is no other kind of bike in his eyes.

As for the Japanese...the Yen is so weak, it's no wonder their sales are down that low. Their bikes are too expensive in markets all over the world. In the UK, they're going for 1.7 times what it is in the USA. Nothing to do with the bikes. It's all about exchange rates.

The typically more expensive Euro bikes are about equal in price, so thet elusively more expensive MV Augusta or Moto Guzzi seem like a good deal these days.
Zippy -Here come the Harley Haters  July 16, 2010 08:36 PM
Wow, japanese imports are down %70!! Imagine losing 2/3rds of your business. Heck, there isn't even a Honda dealer left open in Metro Orlando. You gotta drive 30 miles to find one.

Maybe if they came out with a goofy looking sport touring bike with a really ugly muffler and an automatic transmission!

Bottomline is, people buy Harleys becuase they want Harleys!