Will HOG Zoom Past Analysts’ Earnings Estimates for 2Q16?

Jitendra Parashar - Author

Aug. 18 2020, Updated 5:23 a.m. ET

Harley-Davidson’s 2Q16 earnings

Previously, we discussed how Harley-Davidson’s (HOG) stock has slipped in 2Q16 along with the stocks of other major automakers. Primarily, the company’s inability to protect its margins in recent quarters has triggered pessimism on Wall Street.

Now, let’s have a look at the company’s earnings estimates.

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1Q16 earnings recap

In 1Q16, HOG’s adjusted earnings per share (or EPS) stood at $1.36, reflecting a rise of 7% compared to its EPS of $1.27 in 1Q15. This was also higher than analysts’ consensus estimate of $1.29 for the quarter.

Moreover, investors reacted negatively to rising concerns about the company’s falling profitability and visible stagnation in sales. Despite its higher-than-expected earnings for the quarter, the company was unable to protect its profit margins in 1Q16 due to an adverse product mix and currency headwinds.

2Q16 estimates

Analysts are expecting the existing positive trend in Harley-Davidson’s earnings to continue in 2Q16 as well. According to these estimates, the company is likely to post EPS of $1.54 for the quarter. This represents a rise of ~7% compared to 2Q15. This expectation also seems to be in line with the company’s stagnating sales in the United States—its home market.

Auto industry’s 2Q16 earnings

Among US automakers (IYK), analysts expect General Motors (GM) and Fiat Chrysler (FCAU) to post year-over-year rises in their 2Q16 earnings. General Motors is set to release its 2Q16 earnings on July 21, 2016, while Honda Motor Company (HMC) is likely to release its results on July 29, 2016.

Note that world’s largest automaker, Japan-based Toyota Motor (TM), is likely to release its upcoming earnings results on August 2, 2016.

Continue to the next part to know what analysts are recommending for Harley’s stock ahead of its 2Q16 earnings.


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