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On today's earnings conference call, Harley-Davidson Inc. (NYSE: HOG) CEO Jim Ziemer sounded an upbeat note, attributing most of the softness in the company's 1st quarter results to the recent strike.
He also repeatedly explained that 1st quarter results have not historically been a predictor of year-end results.
Some interesting info from the presentation:
- The company projects EPS to recover in 2008-9, growing 11-17% each year.
- The labor contract for its Kansas City plant is up on August 1, and the Milwaukee mother ship comes up for renewal next spring. Will the settlement of the York contract make subsequent negotiations easier?
- While production was down by almost 12,000 bikes in the 1st quarter, the company will only increase production by 4-7,000 units in the 2nd quarter. The CEO tiptoed around the question about inventory build at the dealer level, but this could be a factor. He pointed out that they have shipped a 1,000 more bikes post-strike than originally projected.
- The CFO dodged the question of the possible impact on retail sales of tightening credit through Harley-Davidson Financial Services, which has 50 percent of the market for financing of H-D bike purchases. The company took an adjustment in this quarter for the change in credit climate.
- CEO Ziemer repeatedly promoted the potential of the international market which had double-digit growth for the 10th quarter in a row. Europe was up 25.7%.
- Harley-Davidson plans to continue pursuing the 21.9 million share board-authorized repurchase of stocks when the market price is favorable. I thought he implied that the current price might fit that criteria, one reason the stock is climbing today.
- They are making a major investment in more face-to-face marketing, i.e. demo rides, at events. All of the top management are required to attend events this year. The company is also putting some serious money into the new Harley-Davidson Museum.
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