Harley Davidson (NYSE: HOG) profit fell 58% in the fourth quarter as the U.S. slowdown caused demand to shrink here and overseas.
Harley sales and profits are shrinking. Its sales fell 6.8% to $1.29 billions and its net income fell 58% to $77.8 million, or 34 cents a share. Analysts expected earnings to be 23% higher, or 57 cents a share on sales of $1.29 billion. For the same period in 2007, it earned $186.1 million, or 78 cents a share.
Harley is taking action -- including plant closures that would result in 1,100 workers losing their jobs. Specifically, it plans to consolidate two engine and transmission plants in Milwaukee into another Wisconsin facility. It will shrink its paint and frame operations at its York, PA plant and close a distribution facility in Franklin, WI. Harley also plans to end its domestic transportation fleet, and to cut shipments between 10% and 13% in 2009.
It's clear that fewer people can borrow or otherwise afford a new Harley -- with its stock down 70% in the last year, the HOG slaughter is likely to continue.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
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Reader Comments (Page 1 of 1)
1-23-2009 @ 10:29AM
Virgil Bierschwale said...
Take a look at the KAAW Barely making it graph.
This is why people arent buying your products.
http://keepamericaatwork.com/?p=910
And our corporations are actively working to make it so that no Americans can buy their products.
How stupid can we get ?
Virgil
http://www.KeepAmericaAtWork.com
1-31-2009 @ 8:50PM
Stock Trader Larry said...
I'll admit it, I own a Harley Davidson and I love it!
As far as the stock goes, as people's income goes down and job losses continue, so will the decreasing demand for Harley Davidson Motorcycles. People who have them will hold on to their existing ones longer before deciding to turn them in and get a new one, resulting in fewer sales. And the increasing job losses mean more HD loans in default, more problems. I agree that cutting the dividend is a must to survive. I can;t see them paying the current dividend yield any longer than the end of this quarter.
2-03-2009 @ 3:22PM
gene greenlief said...
What will happen to Harley Davidson sales when new exhaust decible test procedures such as those proposed in New Hampshire and of interest for California and other states becomes law?
Will Harley riders still ride bikes if they are not allowed to modify the exhaust systems for more sound?
GG