Why Harley-Davidson Stock Fell after Its 4Q17 Report


Feb. 1 2018, Updated 2:53 p.m. ET

Harley-Davidson’s 4Q17 earnings

US-based heavyweight motorcycle maker Harley-Davidson (HOG) released its 4Q17 earnings on January 30, 2018. In the quarter, the company saw adjusted EPS (earnings per share) of $0.47, ~74.1% higher than its adjusted EPS of $0.27 in 4Q16 and slightly better than Wall Street analysts’ 4Q17 estimate of $0.45.

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Stock falls

The day of Harley-Davidson’s 4Q17 earnings release, its stock fell ~8% to close at $50.84. Up until January 30, Harley stock did not see any major changes, while the S&P 500 (SPY) (SPX-INDEX) rose 5.6%. In comparison, auto companies General Motors (GM), Ferrari (RACE), and Tesla (TSLA) rose 4.2%, 12.6%, and 11.1%, respectively.

Key negative factors

While Harley-Davidson’s adjusted earnings improved YoY (year-over-year), its adjusted EPS fell to $0.05 due to one-time tax and recall-related charges.

Despite the company’s 4Q17 revenue growing, a 9.6% YoY drop in global retail motorcycle sales added pessimism. Moreover, Harley’s management expects 2018 US sales to remain weak. The company now plans to focus on driving its international market sales up in 2018 to generate growth.

In 4Q17, HOG’s touring and street motorcycle shipments fell 1.3% and 5.3% YoY, respectively, while its cruiser motorcycle shipments rose 6.6% YoY. In the next article, we’ll look at what analysts are recommending for Harley-Davidson stock after its 4Q17 earnings release.


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