Why Analysts Think Harley-Davidson’s 3Q Earnings Will Remain Weak
HOG’s 3Q17 estimates
Previously, we discussed how Harley-Davidson’s (HOG) stock underperformed legacy auto companies (XLY) like General Motors (GM), Ford (F), and Toyota (TM) in 3Q. HOG’s falling shipments and dismal 2017 outlook could be the key reasons for this weakness on Wall Street.
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2Q17 earnings recap
In 2Q17, Harley-Davidson reported adjusted EPS (earnings per share) of $1.48, which reflected a 4.5% drop from EPS of $1.55 in the same quarter of the previous year. However, this was better than analysts’ second-quarter estimates of $1.39.
Investors reacted negatively to a YoY (year-over-year) fall in the company’s 2Q17 EPS, and the stock closed with 5.9% losses on the day of its earnings announcement. The company reported a YoY decline in its shipments and revised its fiscal 2017 guidance downward.
HOG has been witnessing stagnation in its home market sales figures for the last few quarters, which has hurt investors’ sentiments.
3Q17 EPS estimates
Analysts are expecting Harley-Davidson’s 3Q17 earnings to fall on a YoY basis. According to these estimates, the company is expected to report EPS of $0.39 for the quarter, a decrease of about 39.1% from $0.64 in 3Q16. Harley-Davidson’s stagnating sales and HOG management’s dismal guidance could be the key reasons why analysts are estimating its upcoming earnings to remain weak.
Continue to the next part to know what analysts are recommending for Harley’s stock ahead of its 3Q17 earnings event.