What to Keep an Eye on during HOG’s 4Q17 Earnings Event


Jan. 26 2018, Updated 9:02 a.m. ET

Harley’s 4Q17 earnings event

So far in this series, we’ve covered analysts’ estimates for Harley-Davidson’s (HOG) 4Q17 results. Overall, analysts’ estimates suggest a recovery in the company’s 4Q17 revenue and profit margins.

However, analysts expect weakness to prevail in Harley’s 2017 earnings due to sales-related challenges and lower profitability. Now, let’s explore some potential key highlights of HOG’s 4Q17 earnings event.

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Growth rate in international markets

In an investors’ meeting held in 2017, HOG’s management revealed its plan to expand the company’s dealer network in international markets. The company aimed to strengthen its presence in developed markets and maximize its potential in emerging markets.

Harley has revealed its plan to add 150–200 dealers in international markets by 2020. In doing so, the company intends to improve its touring motorcycle share internationally. Investors can expect an update on the company’s growth in international markets during its 4Q17 earnings event.

2018 launches and outlook

HOG plans to launch 100 new high-impact motorcycles over the next decade, which translates to about ten new high-impact motorcycles every year. While this might sound challenging, if it’s implemented correctly, the plan could help Harley to expand its customer base significantly. During its 4Q17 earnings event, Harley may inform investors about its plans to launch new motorcycles in 2018.

Moreover, the company’s 2018 outlook is likely to be key for investors. At the beginning of 2017, Harley-Davidson’s management gave a dismal outlook for 2017, which it revised downward in July 2017.

Note that HOG’s profit margins from lightweight motorcycles are typically lower compared to its margins from heavyweight motorcycles. Similarly, mainstream auto industry players (FXD) including General Motors (GM), Honda Motor Company (HMC), and Ford Motor Company (F) also make higher profits from their heavyweight and medium-weight vehicles than they do from small cars.

Read on to the next article, where we’ll take a look at Harley-Davidson’s current valuation multiples before its 4Q17 earnings release.


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