Analysts Estimate Harley-Davidson’s Revenue to Rise in 4Q17


Jan. 25 2018, Updated 12:00 p.m. ET

Existing revenue trend

In 3Q17, Harley-Davidson’s (HOG) revenue stood at ~$0.96 billion, 11.9% lower than its ~$1.1 billion in revenue in 3Q16. On the bright side, the company’s 3Q17 revenue was on par with analysts’ estimate of $0.96 billion. Weak international and US motorcycle retail sales are the key factors that have been affecting HOG’s revenue for the last two consecutive quarters.

Now, let’s see what Wall Street analysts are expecting for the company’s 4Q17 revenue.

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Could 4Q17 revenue be stronger?

Analysts expect Harley-Davidson’s revenue to be $1.0 billion in 4Q17. That’s about 8.7% higher than its revenue of $933 million in the same quarter of 2016.

In contrast, analysts expect the company’s 2017 revenue to fall to $4.9 billion. This annual revenue estimate reflects a fall of ~7.5% from Harley’s $5.3 billion in revenue in 2016.

Key factors

For Harley-Davidson, the United States has always been the largest single market. For this reason, the company’s dependence on US sales remains high. In 2016, HOG’s retail sales fell ~4% YoY (year-over-year) in the US market. This weakness continued in the first three quarters of 2017 as well, which is a reason for concern. Harley-Davidson’s management attributed this fall to continued weak US demand and strong competition.

Despite improved economic conditions in the country in the last couple of years, Harley-Davidson has been struggling to boost its sales in the United States.

Note that like Harley-Davidson, legacy automakers (IYK) General Motors (GM), Ford Motor Company (F), and Fiat Chrysler Automobiles (FCAU) also make the majority of their revenues from the US market.

Continue to the next article to learn about what analysts expect for Harley-Davidson’s margins in 4Q17.


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