DOW JONES NEWSWIRES
Harley Davidson Inc. (HOG) posted a 37% decline in first-quarter
net income on tax and restructuring charges as the iconic
motorcycle maker reported slumping sales and announced more job
cuts.
Weak consumer spending and weak credit markets have pinched
demand for big-ticket items, prompting a dividend cut and more
layoffs at Harley Davidson, which has been curtailing production
for about a year and faces liquidity problems at its financial
unit. The company has been working to increase sales by
diversifying its customer base to include women and young
riders.
The company said Thursday it would cut another 300 to 400 hourly
production jobs in addition to the 1,100 jobs it announced in
January, producing some $120 million to $150 million in charges
through 2010. The company expects to save up to $25 million this
year and as much as $55 million in 2010.
Meanwhile, Harley Davidson reported first-quarter net income of
$117.3 million, or 50 cents a share, down from $187.6 million, or
79 cents, a year earlier. The latest results included $57.4 million
in charges.
Revenue slipped 1.2% to $1.3 billion as global retail motorcycle
sales dropped 12%.
Analysts expected earnings, excluding items, of 51 cents a share
on revenue of $1.3 billion, according to Thomson Reuters. Excluding
the charge, earnings were above expectations and shares were up 5%
in pre market trading to $18.00
Despite the retail-sales drop, motorcycle shipments rose 3.9%.
U. s. sales dropped 9%, a lesser decline than the prior two
quarters.
Meanwhile, the financial services segment, roiled by the
credit-market owes, dropped 68% on a $25.7 million write downs
related to secularization interests and receivables for sales due
to higher credit losses.
-By Katherine E. Wegert, Dow Jones Newswires; 201-938-5294;
katherine.wegert@dowjones.com