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Analysts Expect Harley-Davidson’s 1Q18 Revenues to Be Weak

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The existing trend in revenues

In the fourth quarter of 2017, Harley-Davidson’s (HOG) revenues were $1.04 billion, which was 12.2% higher than $933 million in 4Q16. Its revenues were slightly better than analysts’ estimate of $1.01 billion. Despite weak international and US market retail sales, an 11.3% YoY (year-over-year) positive growth in motorcycle shipments had a positive impact on HOG’s revenues in the fourth quarter of 2017.

Now let’s see what Wall Street analysts are estimating for the company’s 1Q18 revenues.

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Expectations from 1Q18 revenues

Analysts were estimating Harley-Davidson’s revenues to be $1.2 billion in 1Q18. That’s about 7.1% lower than $1.3 billion in the same quarter of 2017.

In contrast, analysts estimate that the company’s 2018 revenues should fall to $4.9 billion. That annual revenue estimate is a decrease of 1.1% from 2017.

Weak home market sales

For Harley-Davidson, the United States has always been the largest single market. It remains highly dependent on US sales. In 2017, HOG’s retail sales fell 8.5% YoY in the US market. No major signs of recovery in its home market sales are expected in recent quarters, which could be a reason for concern.

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

Like Harley-Davidson, legacy automakers (FXD) General Motors (GM), Ford (F), and Fiat Chrysler (FCAU) also generate a large portion of their sales from the US market.

Next, let’s see what analysts are estimating for Harley-Davidson’s margins in 1Q18.

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