DOW JONES NEWSWIRES
Harley-Davidson Inc.'s (HOG) third-quarter earnings dropped 84%,
falling short of analyst estimates, as the motorcycle maker
continued to suffer from slowed sales during the economic
downturn.
The company also said it will discontinue its Buell product line
and divest its MV Agusta unit as part of its strategy to become
more profitable.
Shares fell 3.6% premarket to $25.31.
As motorcycle demand has dropped during the recession,
Harley-Davidson has been forced to cut costs and slash jobs. Sales
have slowed, and the company in July cut back its forecast for
shipments through the end of the year.
But Harley-Davidson said Thursday that demand may be picking up
slightly as sales declined less in the third quarter than in the
second.
"While the environment remains challenging for us, we are mildly
encouraged by the moderation in the decline of dealer retail
Harley-Davidson motorcycle sales," said Chief Executive Keith
Wandell, who assumed the office in May.
The company reported a third-quarter profit of $26.5 million, or
11 cents a share, down from $166.5 million, or 71 cents, a year
earlier. Revenue decreased 21% to $1.12 billion.
Analysts polled by Thomson Reuters had forecast earnings of 21
cents on $1.1 billion in revenue.
Worldwide motorcycle retail sales fell 21% to 63,729 units, with
U.S. sales dropping 24%.
The company said Thursday it expects to ship 222,000 to 227,000
motorcycles to dealers for the year, including 35,000 to 40,000
during the fourth quarter. The 2009 view is the high end of July's
sharply reduced target.
Harley-Davidson's financial services segment, which was wrecked
by the credit crunch, swung into the red.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com